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Lemur [1.5K]
3 years ago
15

Suppose that borrowing is restricted so that the zero-beta version of the CAPM holds. The expected return on the market portfoli

o is 17%, and on the zero-beta portfolio it is 8%. What is the expected return on a portfolio with a beta of 0.7? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Business
1 answer:
statuscvo [17]3 years ago
6 0

Answer:

The expected return on a portfolio is 14.30%

Explanation:

CAPM : It is used to described the risk of various types of securities which is invested to get a better return. Mainly it is deals in financial assets.

For computing the expected rate of return of a portfolio , the following formula is used which is shown below:

Under the Capital Asset Pricing Model, The expected rate of return is equals to

= Risk free rate + Beta × (Market portfolio risk of return - risk free rate)

= 8% + 0.7 × (17% - 8%)

= 8% + 0.7 × 9%

= 8% + 6.3%

= 14.30%

The risk free rate is also known as zero beta portfolio so we use the value in risk free rate also.

Hence, the expected return on a portfolio is 14.30%

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Click on the item below that contains a comma splice.
vodka [1.7K]

Answer:

The item that contains a comma splice is:

C. Martin Luther was born in Eisleben, Germany, about 110 kilometers from there is Wittenberg, where he nailed his ninety-five theses to the door.

Explanation:

The comma splice occurred when two independent clauses are incorrectly joined by a comma instead of a semicolon or a full stop. To avoid this comma splice, the independent clause, "about 110 kilometers from there is Wittenberg," is identified.  We can either put a semicolon after Germany or a full stop.  Putting a full stop separates the sentence into two.

4 0
3 years ago
"Roper Spring Water" is considering a new bottling line that costs $230,000, last 4 years, and yields cost savings of $55,000 in
Tcecarenko [31]

Answer:

Roper Spring Water should not buy the machine, since it produces a negative net present.

Explanation:

Summary of Cash Flows on the Machine are as follows :

Year 0 = ($230,000)

Year 1  = $55,000

Year 2 = $65,000

Year 3 = $75,000

Year 4 = $75,000

Interest rate = 7%

Using the CFj Function of the Financial calculator this will be computed as :

($230,000)  CF j 0

$55,000      CF j 1

$65,000      CF j 2

$75,000      CF j 3

$75,000      CF j 4

i/yr  = 7%

Therefore Net Present Value is - $3,385.13

Since this is a negative Net Present Value, Roper Spring Water should not buy the machine.

8 0
2 years ago
Under the uniform capitalization rules applicable to taxpayers with property acquired for resale, which of the following costs s
pashok25 [27]

Answer:

The correct answer is A

Explanation:

As per the UNICAP (stands for Uniform Capitalization) rules, the person have to capitalize the cost for creating the assets, which means or defines as to capitalize the raw materials, labor cost and other indirect as well as direct costs that is attributable to the production of the assets.

So, the costs which is to be capitalized in respect to inventory are the repacking cost, which is involved in the indirect supplies and other materials and the off site storage cost is involves in the rental of the facilities and equipment.

6 0
2 years ago
Trevor Company expects sales of Product W to be 60,000 units in April, 75,000 units in May, and 70,000 units in June. The compan
Sedbober [7]

Answer:

65000 units

Explanation:

Given:

Expected sales of product W in April  = 60000 units

Expected sales of product W in May  = 75000 units

Expected sales of product W in June  = 70000 units

Inventory in hand at the end of each month = 40% of the next month's expected sale

Inventory expected at the end of the April = 40% of the expected sales in May

or

Inventory expected at the end of the April = 0.4 × 75000 = 30000 units

Therefore, the total units required in April =  Expected sales of product W in April + Inventory expected at the end of the April

or

the total units required in April = 60000 + 30000 = 90000 units

Now,

Excessive production in March (inventory) = 25000 units

Hence, the units required to be produced in April = the total units required in April - Excessive production in March (inventory)

or

the units required to be produced in April = 90000 - 25000 = 65000 units

7 0
3 years ago
A target market often includes more than one market segment
stira [4]

yes a target market often includes more than one market segment.

A target market is a array of customers inside a business's serviceable accessible market at which a business targets its marketing attempts and resources. A target market is a subdivision of the complete market for a product or service.

The target market mostly comprises of consumers who shows similar traits(such as age,location,income or lifestyle) and are considered most probable to buy a buisness’s market offerings or are probable to be the most gainable section for the buisness to service.

THUS MARKET INCLUDES MORE THAN ONE SEGMENT

8 0
3 years ago
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