Answer:
Security D
Explanation:
Fair rate of Return =
where B = Beta, which is the degree of responsiveness of security return to market return
= Risk Free Rate of return
= Return on market portfolio
Risk premium which is, 10 - 4 = 6 %
Thus, for security A = 4 + 0.85 × 6 = 9.1%
for security B = 4 + 0.75 × 6= 8.5%
for security C = 4 + 1.2 × 6 = 11.2%
for security D = 4 + 1.35 × 6 = 12.1%
for security E = 4 + 0.5 × 6 = 7%
Expected returns as given
for A = 7%
for B = 9%
for C = 9.5%
for D = 12.1%
for E = 14%
As is evident, the fair and expected return for stock D is the same i.e 12.1%. Hence, the investor would be indifferent in that case whether to buy, sell or hold such a stock.
Answer:
Beta= 1.4886
Explanation:
<u>Giving the following information:</u>
<u></u>
You own a stock portfolio invested 32 percent in Stock Q, 22 percent in Stock R, 19 percent in Stock S, and 27 percent in Stock T.
The betas for these four stocks are 1.63, 1.35, 2.56, and 0.68, respectively.
<u>To calculate the portfolio beta, we need to use the following formula:</u>
<u></u>
Beta= (proportion of investment A*beta A) + (proportion of investment B*beta B)
Beta= (0.32*1.63) + (0.22*1.35) + (0.19*2.56) + (0.27*0.68)
Beta= 1.4886
Answer:
utilities payable 230
cash 230
to record payment of November bill
Computer 9,800
Cash 400
Account payable 9,400
to record purchase of computers
Explanation:
we will credit cash for the amount paid to cancel the tlephone invoice.
We will write-off the payable recognize in Novemeber when the invoice was received.
We will debit the acquired assets (computer)
credit the amount of cash given
and then credit the remainder to recognize the obligation to pay these computers in the near future.
Answer: $6.08
Explanation:
To calculate the coupon payment it must have paid in December 2018 if the CPI was 247.91 in December 2017 and 251.23 in June 2018 will be:
Face value = $1000
Coupon rate = 1.2%
= Face value × Coupon rate / 2 × CPI June 2017 / CPI December 2018
= (1000 × 1.2%)/{(2 × 251.3)/247.91}
= 12/(502.6/247.91)
= 12/2.027
= $6.08