1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
zimovet [89]
4 years ago
8

Assume that the risk-free rate, rRF, increases but the market risk premium, (rM – rRF), declines with the net effect being that

the overall required return on the market, rM, remains constant. Which of the following statements is CORRECT?
a. The required return will decline for stocks that have a beta less than 1.0 but will increase for stocks that have a beta greater than 1.0.
b. The required return of all stocks will increase by the amount of the increase in the risk-free rate.
c. The required return will increase for stocks that have a beta less than 1.0 but decline for stocks that have a beta greater than 1.0.
d. Since the overall return on the market stays constant, the required return on each individual stock will also remain constant.
e. The required return of all stocks will fall by the amount of the decline in the market risk premium.
Business
1 answer:
Vera_Pavlovna [14]4 years ago
6 0

Answer:

the correct answer is d

Explanation:

You might be interested in
Suppose that JAN Corp. will issue a new 10 year AA rated corporate bond with a coupon rate of 7.00%. The bond pays interest semi
k0ka [10]

Answer:

The bond was issued at a premium of $ 155.89

Explanation:

In determining whether the bond was issued at premium or discount,it is important to ascertain the price at which the bond was issued first and foremost.

In arriving the price of he bond, all of the future cash flows of the bond are discounted to present values using the discounting factor 1/(1+r)^N

Find detailed calculation in the attached.

Download xlsx
3 0
3 years ago
Melissa sells a house to Smith. Before the sale is finalized, Smith asks Melissa for details of repairs the house has undergone
krok68 [10]

Answer:

d

Explanation:

There are no laws concerning total honesty in the sale of homes. Especially since the problem has been fixed.

7 0
4 years ago
If the natural rate of unemployment was 5 percent, the current unemployment rate was 6 percent, and potential GDP was $4,000 bil
Georgia [21]

Answer:

$80 billion

Explanation:

Okun law equation: GDP gap = Actual GDP * ((Unemployment rate - Natural rate)/100)*2)

GDP gap = $4,000 * ((6-5)/100*2)

GDP gap = $4,000 * 0.02

GDP gap = $80 billion

Therefore, $80 billion in an output level thus, would be what the economy would have sacrificed.

7 0
3 years ago
Nelson Company experienced the following transactions during Year 1, its first year in operation. 1. Acquired $8200 cash by issu
Lyrx [107]

Answer:

$2350.

Explanation:

The computation of the net income is shown below:

= Service revenue - operating expenses

= $4,500 - $2,150

= $2,350

The other items are related to the retained earning account, assets account, stockholder equity account. So, these items should not be considered in the computation part. Hence, ignored it

6 0
3 years ago
Adel wrote Abdullah, "I will sell you my house and lot at 419 West Lombard Street, San Francisco, California for $950,000 payabl
enyata [817]

Adel's letter is not an offer unless both Adel and Abdullah considered it as an offer.

Explanation:

In the context given above is an offer if the letter is accepted by both the parties as an offer. Here Adel is writing a letter where he wants to sell his house $950000 payable upon merchant deed and this deal has to be completed within 60 days the day when it was accepted. In this letter he is also mentioning that he wants to sell the house to Abdullah. Hence this letter becomes a deal when both of them accept it from their parts.

3 0
3 years ago
Other questions:
  • What is the difference between the federal budget deficit and federal government​ debt?
    12·2 answers
  • Briefly explain utility
    11·1 answer
  • In four or more sentences, explain if rent control is a price floor or price ceiling. Then explain one advantage and one disadva
    12·1 answer
  • Which of the following is one of the tasks a network risk analyst might complete?
    11·1 answer
  • Why don't snakes have spines?
    15·1 answer
  • Which of the following is a TRUE statement regarding the Federal Reserve System? A. The national government owns the Federal Res
    9·2 answers
  • For the year ended December 31, year 3, Colt Corp. has a loss carryforward of $180,000 available to offset future taxable income
    7·1 answer
  • Your friends suggest that you take a 15-year mortgage, because a 30-year mortgage is too long and you will pay a lot of money on
    5·1 answer
  • if you cause a car accident, which type of insurance will require you to pay the least out of pocket?
    8·1 answer
  • You have a great idea for a business and are excited to get to work. You come across a similar business when doing searches onli
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!