Answer:
C. 13.6 percent
Explanation:
In this question, we apply the Capital Asset Pricing Model (CAPM) formula which is shown below
Expected rate of return = Risk-free rate of return + Beta × risk-free rate of return + Beta × market risk premium
= 4% + 0.6 × 4% + 1.2 × 6%
= 4% + 2.4% + 7.2%
= 13.6%
The (Market rate of return - Risk-free rate of return) is also known as market risk premium
Answer:
The correct answer is option d.
Explanation:
An increase in the market demand will cause the market demand curve to move to the right. This rightward shift in the demand curve will lead to an increase in the market price.
This increase in market price will cause the individual demand curves to move upwards. As the price increases, the profits earned by the firms will increase as well.
Profit to a firm is the difference between its total revenue and total cost, as the price increases, revenue will increase and cost will remain the same. This will cause profits to increase.
Answer:
$38,851 approx
Explanation:
As per the information provided in the question, the minimum annual rate of return would be at-least equal to the usual rate of return the investor (here uncle) earns. Here it is 9% per annum.
Anything earned below this rate of return will not satisfy the investor since this represents the minimum required rate of return.
A=
Where A= Amount
P= Principal
r= Annual Rate Of Interest
n= period of loan
Therefore, A=
A= $38,850.87 or $38,851 approx.