Answer:
1. The riskier stock is the one with the higher beta which is Handy Ltd.
Use CAPM to calculate the required return on both stocks. The formula is:
Required return = Risk free rate + beta * (market return - risk free rate)
Gans Ltd Stock Handy Ltd Stock
= 4% + 0.9 * ( 10% - 4%) = 4% + 1.8 * (10% - 4%)
= 9.4% = 14.8%
Difference = 14.8 - 9.4
= 5.4%
2. a. Expected return
Expected return is a weighted average of the returns given the probability of the different state of economies.
= (0.25 * 18%) + (0.4 * 5%) + (0.35 * -2%)
= 0.045 + 0.02 - 0.007
= 5.8%
b. Required return
Using CAPM like in question 1:
Required return = Risk free rate + beta * (market return - risk free rate)
= 4% + 1.2 * ( 10% - 4%)
= 11.2%
c. The asset <u>should not be purchased</u> because its expected return is lower than its required return. This means that the stock is not providing enough return for the risk incurred.
Answer:
b. False
Explanation:
A Referent power in an organization my be defined as the power of a person or a company that is based on high level of identification with that of admiration or inspiration or out of respect.
Thus in the context, the Acme company does not uses its referent power to its distribution channel when the company decides to limit the supply of the its compressors to some of its distributors as the distributors are selling some of the air compressors of the competitor company.
Hence the answer is FALSE.
Answer:
4
Explanation:
The chi-squared test tests whether distribution of a population of something (such as people, traits etc) into categories deviates significantly from expected values.
The degrees of freedom represents the number of independent ways by which a system can change. The degree of freedom is always the number of categories being analyzed minus 1.
Therefore, the degrees of freedom in this example is 5-1 = 4
Question options:
a. facility-challenged
b. substandard
c. tier 1
d. noncomprehensive
Answer:
d. noncomprehensive
Explanation:
Oliver has a noncomprehensive long term care(LTC). A non comprehensive long term care is policy that restricts services to the ones provided at a nursing facility, and so Oliver pays for the benefits of only the services of a nursing facility . It is different from a comprehensive long term care where services cover and can be provided at an adult day care, home, assisted living facilities, or at nursing facilities.
Answer: Please refer to the explanation section
Explanation:
the question is incomplete, example in problem 6 in not provided , how ever the question is clear enough with regards to what is required we will explain the effects of migration in the united states economy.
Many Sectors in the economy of the united states, have benefited and continue to benefit from the immigration into the united states from mexico. When Mexicans migrate to the United states different sector benefit because of the expanded skilled and semi skilled workforce. Hospitality sector, construction sector, Business sector benefits from the migration of Mexicans to the united states even the government does benefit because more workers more tax collected. however there are costs associated with immigration for mexico and united states with mexico loosing skilled labour. The big winners in immigration are immigrants them selves.
Immigrants get access to quality services and their standard of living improves because of working and living in a developed country like The united states.
Immigration would increase rapidly if borders were open with no restrictions on immigration, an increased number of people migrating to the United State will end up creating more costs than benefits for the country. Unemployment rate will increase because there would more work than jobs available.
