Answer:
b. 3.70 percent
Explanation:
Expected rate of return of a stock, given probabilities, is calculated by summing up the product of probability of each state occurring by the expected return of the stock should that happen.
Expected rate of return = SUM (probability *return)
Boom;(probability* return) = (0.15* 0.10) = 0.015 or 1.5%
Normal ;(probability* return) = (0.70* 0.04) = 0.028 or 2.8%
Recession ; (probability* return) = (0.15* -0.04) = -0.006 or -0.6%
Next, sum up the expected return for each state of the economy to find the expected rate of return on this stock;
= 1.5% + 2.8% -0.6%
= 3.7%
Therefore, the correct answer is choice B.
Answer:
implied credit spread = 1.13 %
Explanation:
given data
interest on foreign government bonds = 7.5%
current exchange rate = 28
forward exchange rate = 28.5
risk-free rate = 4.5%
solution
we get here risk free rate by the forward exchange rate that is
F = spot exchange rate × \frac{1+Rr}{1+Rs} ....................1
put here value
28.5 = 28 × \frac{1+Rr}{1+0.045}
solve it we get
Rr = 0.0637
Rr = 6.37%
so
implied credit spread = interest on foreign government bonds - risk free rate
implied credit spread = 7.5% - 6.37%
implied credit spread = 1.13 %
Answer:
It is Business Impact Assessment (B)
Explanation:
Organizational plans and business decisions are vulnerable to various risks that could hinder them from materializing .
After business decisions have been made at strategic level, there is a need to carry out their business impact assessment to understand the relationship that exist between their impact and their likelihood of occurrence.
Having assessed the impact and likelihood of occurrence, some risks are accepted,transferred while some are completely avoided.
Answer: i. €0.11
ii. €1.08
Explanation:
i. If we get 1 krona for every $0.13 then how many krona do we get per dollar?
= 1/0.13
= 7.69 Krona is to $1
If $1 is 7.69 Krona and $1 is also €0.85 then that means that,
€ 0.85 = 7.69 Krona
So for each Krona exchanged, we get how many Euro,
= 0.85/7.69
= 0.11
For each Krona exchanged, we get €0.11
ii. Following the example of the first question,
if £1 is to $1.12 then how many pounds are a dollar?
= 1/1.12
= 0.89
£0.89 is equal to a dollar.
if €1 is to $1.04 then how many euros are a dollar?
= 1/1.04
= 0.96
€0.96 are equal to a dollar.
This means that,
£0.89 = €0.96
So for every British Pound exchanged we get how many Euros?
= 0.96/0.89
= 1.078
= €1.08
For every British pound Exchanged, we get €1.08
Answer:
B) underestimated the competition.
Explanation:
Maya is trying to pursue a dream of having her own bakery in a vibrant seaside resort town and thought that by using her grandmother's recipes, her business would be a success. But in order for a business to be successful, it takes more than just a great product (or great cookies, muffins, etc.).
The first thing you need to do is analyze the external environment and what other products are offered by your competition. That way you will be able to determine the opportunities or threats to you new venture. E.g. since the town hosts several upscale and expensive resorts, the clients are wealthy and that market attracts good chefs. I'm not sure if they hand out Michelin stars to bakeries, but if you have very good products offered by your competition, then you must work twice as hard.
