Answer: d. The actual expected stock return indicates the stock is currently underpriced.
Explanation:
According to CAPM, the expected return is:
= Risk free rate + beta * (market return - risk free rate)
= 4.3% + 1.14 * (12.01% - 4.3%)
= 13.09%
The actual expected return is greater than the CAPM expected return.
This stock is underpriced because it is bringing in a higher return than CAPM predicted based on the market.
Answer:
The resources are allocated by the combined actions of the firms and the households and the central planning authority like the government.
Explanation:
Market economy is the economy where the demand and the supply laws direct the production of the services and goods. The supply involve the labor, natural resources and capital. Demand comprise of purchases by the consumers and the government.
In the market economy, the resources are allocated by the decisions of the firms and the households who are interacting in markets. It is an economy where the most economic decisions are the consequence from the interaction of the sellers and the buyers in the market but the government also plays a very vital role while allocation of resources are done.
Answer:
The correct answer is letter "A": journalize the daily transactions in the inventory account.
Explanation:
Physical inventories are the process of measuring the material items of a company's stock. The measures can be given in terms of numbers or weighing the objects. The most common methods of measuring inventory in a company are the perpetual inventory system which is used as soon as inventory is received or sold and the periodic inventory system every certain period which could be every month, quarter, or year.
<em>A physical inventory is not used to journalize transactions every day in the corresponding inventory accounts.</em>
Answer:
they are dependent on situational probabilities
Explanation:
Arturo's decision about which torch to purchase is being made under conditions of ambiguity , because: they are dependent on other factors.
The decision making is not certainty because his decision on which torch to buy is dependent on probabilities neither is it uncertain because we have information on probabilities of what the outcome might be.
Hence the decision making is ambiguous because it is between certain and uncertain and its outcome is dependent on the probabilities of having a discount or not.
Answer: Option (A) is correct.
Explanation:
Given that,
Marginal propensity to consume (MPC) = 0.8
Increase in investment spending = $10 million
Marginal propensity to save (MPS) = 1 - MPC
= 1 - 0.8
= 0.2
Spending multiplier =
=
= $50 million
Therefore, If the MPC is .8 and there is a $10 million increase in investment spending, then the aggregate demand curve will shift up and to the right by $50 million.