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Firlakuza [10]
3 years ago
6

​A stock's average return is 10 percent. The average risk-free rate is 7 percent. The standard deviation of the stock's return i

s 4 percent, and the stock's beta is 1.5. What is the Treynor index for the stock?
Business
1 answer:
svet-max [94.6K]3 years ago
4 0

Answer:

The Treynor index for the stock will be 0.02.

Explanation:

The average return of the stock is 10%.

The average risk-free rate is 7%.

The standard deviation of the stock's return is 4%.

Stock's beta is given at 1.5.

Treynor index

= (Portfolio return- risk free return)/beta of the portfolio

=(0.10-0.07)/1.5

=0.03/1.5

=0.02

So, the Treynor index for the stock will be 0.02.

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What are the primary functions of a central bank?
Vesnalui [34]

Answer:

The correct answer is:

  • Conduct monetary policy;
  • Ensure that the financial system is stable;
  • Provide banking services to commercial banks, depository institutions, and the federal government.

Explanation:

A central bank is the apex monetary authority in a country. It plays several crucial roles in the smooth working of the economy.

  1. A central bank issues currency on behalf of the government.
  2. It formulates monetary policy on behalf of the government.
  3. It acts as a banker for the government.
  4. It acts as a banker for commercial banks.
  5. It supervises all financial institutions.

The role of providing services to businesses and consumers is played by commercial banks. Fiscal policy is formulated by the government. The responsibility of ensuring the growth of the economy also falls with the government.

4 0
3 years ago
Zach Company owns 45% of the voting stock of Tomas Corporation and uses the equity method in recording this investment. Tomas Co
Sunny_sXe [5.5K]

Answer:

d. Credit to the investment account for $9000.

Explanation:

Since Zach company owns 45% of the voting stock in the Tomas corporation and Tomas corporation uses an equity method in recording this investment and it reports a net loss of $20,000.

The Zach company's entry would be Credit to the investment account for $9000.

- Calculations: $20000 * 0.45 = 9000.

Hope this helps.

ThankYou.

6 0
3 years ago
Read 2 more answers
A company reported that its bonds (a long-term liability) with a par value of $50,000 and a carrying value of $61,000 are sold f
Dimas [21]

Answer:

c and e

Explanation:

8 0
3 years ago
How does an improvement in consumer confidence affect the consumption function and the aggregate demand curve?
puteri [66]
If the consumers are further confident they will expend additional dollars at entirely earnings stage and the consumption function moves upward. This increase in expenditure reasons the aggregate demand curve to move to the right. The ceteris paribus is known as a alteration in interest rates reasons a movement alongside the investment demand curve.
3 0
3 years ago
Read 2 more answers
Young Co. issues $800,000 of 10% bonds dated January 1, Year 1. Interest is payable semiannually on June 30 and December 31. The
Andreyy89

Answer:

Young should report proceeds from the sale of bonds as equal to $864,884

Explanation:

The proceeds on the sale of bonds is equivalent to the present value of all the cash flows that are likely to accrue to an investor once the bond is bought. These cash-flows are the periodic coupon payments that are paid semi-annually and the par value of the bond that will be paid at the end of the 5 years.

During the 5 years, there are 10 equal periodic coupon payments that will be made. In each  year, the total coupon paid will be

$800,000*0.1=$80,000

and this payment will be split into two equal payments equal to \frac{$80,000}{2} = $40,000 . This stream of cash-flows is an ordinary annuity

The periodic market rate is equal to \frac{0.08}{2}=0.04

The  PV of the cashflows = PV of the coupon payments + PV of the par value of the bond

=$40,000*PV Annuity Factor for 10 periods at 4%+ $800,000*\frac{1}{(1+0.04)^10}

=$40,000*8.1109+$800,000*0.67556=$864,884

4 0
3 years ago
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