1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
puteri [66]
3 years ago
7

Stock A has a beta of 1.2, and stock B has a beta of 1. The returns of stock A are ______ sensitive to changes in the market tha

n are the returns of stock B. A. 20% more B. slightly more C. 20% less D. slightly less
Business
1 answer:
stellarik [79]3 years ago
3 0

Answer:

Option A, 20% more, is the right answer.

Explanation:

Given the beta value of stock A =  1.2

The beta value of stock B = 1

The beta value of stock A is greater than the stock B. Here, we can see that the beta of stock A  is large by 20% as compared to the beta of stock B.

It can be calculated as = (Beta of stock A – Beta of stock B) / Beta of stock B

= (1.2 – 1) / 1

= 0.2 or  20%

Therefore, the return will also be more than 20%.

Thus, option A. 20% more is correct.

You might be interested in
On April 1, Quality Corporation, a U.S. company, expects to sell merchandise to a French customer in three months, denominating
KengaRu [80]

Answer:

The correct answer is option (d) $8,000 Discount Expense plus a $20,000 positive Adjustment to Net Income when the merchandise is delivered.

Explanation:

Solution

Given that:

Spot rate:

1 euro = $1.41

Now,

Converting 400,000 euros into dollars gives us the following

400,000*1.41 =$564,000

Thys,

Contract rate,

=1 euro = $1.36

So,

Converting 400,000 euros into dollars gives us

400,000*1.36 = $544,000.00

Hence,

The increase  in net income =$564,000- $544,000

=$20,000

8 0
2 years ago
Commodity money is the best, safest kind of money.<br> Select one:<br> True<br> False
ladessa [460]
I would say true. Bcus it is made from silver
3 0
3 years ago
Maxwell Communications paid a dividend of $1.35 last year. Over the next 12 months, the dividend is expected to grow at 11 perce
PilotLPTM [1.2K]

Answer:

Current dividend paid (Do) = $1.35

Growth rate (g) = 11% = 0.11

Cost of equity (ke) = 24% = 0.24

Po = Do<u>(1 + g)</u>    

           Ke - g

Po = $1.35<u>(1 + 0.11)</u>

                 0.24 - 0.11

Po = <u>$1.4985</u>

            0.13

Po = $11.53                                                                                                                                                                                                                

Explanation:

The current market price of the stock is a function of current dividend paid, subject to growth rate, divided by the current market price of the stock.

4 0
3 years ago
Conditions of confinement lawsuits often allege what?
sergeinik [125]
They allege that officials have deprived inmates of their constitutional rights

8 0
2 years ago
You visit a tropical island that has only four goods in its economy—oranges, pineapples, coconuts, and bananas. there is no mone
Reil [10]
I don’t know sadly I don’t know I don’t know sadly I don’t know
8 0
3 years ago
Other questions:
  • How much automation used to be in restaurant in 1950s?
    5·1 answer
  • Congress would like to increase tax revenues by 11.5 percent. assume that the average taxpayer in the united states earns $62,00
    15·1 answer
  • Tell Me Why Co. is expected to maintain a constant 6 percent growth rate in its dividends indefinitely. If the company has a div
    15·1 answer
  • What type of integration best describes the type of organization bp is?
    9·1 answer
  • If fixed costs increase, the break-even point in units will
    8·1 answer
  • Capital budgeting decisions are risky because the outcome is uncertain, large amounts are usually involved, the investment invol
    15·1 answer
  • 1. As an Organizational Psychologist, you have thought of arranging a picnic in two weeks' time for your employees from all depa
    7·1 answer
  • Can I use MemberPress to create and sell online courses?
    6·2 answers
  • On January 1, 2019, Sanders Corporation purchased equipment having a fair value of $68,301.30 by issuing a non-interest-bearing,
    13·1 answer
  • Mcclelland's research suggests that the need for achievement is?
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!