Answer: Risk free rate = 1.9%
Explanation:
The Capital Asset Pricing Model allows for the calculation of the required return using the market return, beta and risk free rate.
Required return = Risk free rate + Beta * ( Market return - Risk free rate)
First find the market rate. Stock Y is uniquely positioned to help with that:
12.4% = Risk free rate + 1.0 * (Market return - Risk free rate)
12.4% = rf + Market return - rf
Market return = 12.4%
Apply this to the formula using Stock Z:
8.2% = rf + 0.6 * (12.4% - rf)
8.2% = rf + 7.44% - 0.6rf
rf - 0.6rf = 8.2% - 7.44%
0.4rf = 0.76%
rf = 0.76% / 0.4
Risk free rate = 1.9%
It is C! Fossil A is younger than the index fossil. Hope this helps!
DC motors are usually seen in applications where the motor speed needs to be externally controlled. AC motors work best in applications where power performance is sought for extended periods of time. All DC motors are single phase, but AC motors can be single phase or three phase.
AC and DC motors use the same principle of using an armature winding and magnetic field except with DC motors, the armature rotates while the magnetic field doesn’t rotate. In AC motors the armature does not rotate and the magnetic field continuously rotates.
In some applications today, DC electric motors are replaced by combining an AC electric motor with an electronic speed controller, known as variable frequency drives. DC electric motors are replaced with an AC electric motor and an electronic speed controller because it is a more economical and less expensive solution.
DC electric motors have many moving parts that are expensive to replace, and DC electric motor repair is usually more expensive than using a new AC electric motor with an electronic controller.
In our experience, combining an AC motor and drive proves to be the most cost effective solution for mostapplications. When servicing our customers in the field, we often recommend looking at the SMVector Series Variable Frequency Drive in combination with a three phase AC motor.
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