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
Gnoma [55]
3 years ago
8

Suppose two factors are identified for the U.S. economy: the growth rate of industrial production, IP, and the inflation rate, I

R. IP is expected to be 6% and IR 7%. A stock with a beta of 1 on IP and 0.7 on IT currently is expected to provide a rate of return of 15%. If industrial production actually grows by 7%, while the inflation rate turns out to be 9%, what is your best guess for the rate of return on the stock?
Business
1 answer:
lawyer [7]3 years ago
7 0

Answer:

The new rate of return is 15.4%

Explanation:

The revised estimate on the rate of return on

the stock would be:

• Before

• 14% = α +[4%*1] + [6%*.4]

α = 7.6%

• With the changes:

• 7.6% + [5%*1] + [7%*.4]

The new rate of return is 15.4%

You might be interested in
1. Give one example of professional behavior in a salon and how a cosmetologist could
lana [24]

Answer:

Appropriate language, a cosmetologist can demonstrate this by always speaking in a tone and at a volume that is appropriate for the setting, and never using foul language no matter what.

3 0
3 years ago
Xi-ling has a net income that is 5% of her monthly salary of $2,315. Xi-ling would like to keep a net income of $50 and put any
vivado [14]

Xi-Ling focussed on her debt management by setting aside a part of net income in paying down the debts. The amount that Xi-Ling put towards the debt is $65.75.

<h3>What is Debt Management?</h3>

Debt management is a tool that facilitates keeping the debt under control through planning and budgeting. It helps in clearing the problem of debt at an affordable pace.

Xi-Ling has a monthly salary of $2,315 out of which 5% is her net income. The net income therefore is:

\begin{aligned} \rm Net \:Income &=\rm Salary \times 5\%\\\\&= \$2,315 \times 5\%\\\\&= \$115.75\end

Out of the net income of $115.75, she keeps aside $50 and uses the rest in paying down her debts. Therefore, the amount used for debts is:

\begin{aligned} \rm Amount\:used\:in\:paying\:debts &= \$115.75 -\$50\\\\&= \$65.75\end

Hence the amount Xi- Ling put towards paying down the debts is $65.75.

Learn more about debt management here:

brainly.com/question/7924883

4 0
2 years ago
In Sweden, firms that fail to meet their debt obligations are immediately auctioned off to the highest bidder. (There is no reor
Bess [88]

Based on the information about the debt obligations, to avoid the winner's curse, your bid should not be larger than $3 million. Therefore, it's false.

<h3>What are debt obligations?</h3>

It should be noted that debt obligations simply means the debt securities that are issued by companies in regards to money borrowed.

The firms that fail to meet their debt obligations are immediately auctioned off to the highest bidder in Sweden. In such a case, the current managers are often the high bidders for the company.

In such situations, to avoid the winner's curse, your bid should not be larger than $3 million. This is because it's the approximate intrinsic value.

In conclusion, based on the information about the debt obligations, her correct option is false.

Learn more about debt on:

brainly.com/question/2192765

#SPJ1

4 0
2 years ago
In order to achieve price stability, inflation must be zero. <br> a. True <br> b. False
gogolik [260]
False, inflation does not need to be zero to achieve price stability. Although the ideal rate of inflation is zero, that's likely not going to happen. Most record a low inflation rate of of 1% give or take, but not zero. The key factor in price stability is to have a low and consistent inflation rate over time. 
3 0
3 years ago
Economic advances in many countries have led to the:
masya89 [10]

Complete Question:

Economic advances in many countries have led to the

A) emergence of increasingly prosperous middle and working classes.

B) decline of middle and working classes.

C) emergence of closed and self-contained societies. D) rise of totalitarian reforms.

E) decline of property rights.

Answer:

Economic advances in many countries have led to the emergence of increasingly prosperous middle and working classes.

Explanation:

Economic advancements is improving your country's infrastructure. These improvements can either be emotional or government-oriented (such as road maintenance or railway services) (such as legislative or court system).

The growth of the United States is the best in decades. If you somehow look at overall middle-income family's financial lifetimes — his income expense, assets and interest payments— as well as how developments since Election Day 2016 were supposed to impact them, you will get a more mixed picture. It is also true that inflation is high and the level of unemployment is at a generational pace.

4 0
3 years ago
Other questions:
  • Your auto insurance policy has a 200 monthly premium and 700 deductible. What is the maximum amount you will have to pay out of
    8·2 answers
  • Suppose the Bank of Tazi loaned the banks of Tazi 10 million tazes. Suppose also that both the reserve requirement and the perce
    5·1 answer
  • Barbara Hastings has no children of her own, but she does have a beloved niece named Ellen Laughridge. Attentive to the future f
    6·1 answer
  • Sources of consumer information might include ____.
    9·1 answer
  • Zach is a salesperson at a large medical supply company. the company wants zach to learn to manage multiple departments, so it o
    12·1 answer
  • One year of college tuition at a state school is about the same cost as a toyota camry. this is an example of:
    9·2 answers
  • Written evidence of the ownership of a piece of property
    11·1 answer
  • Who is the sixth chief minister of Uttarakhand​
    13·1 answer
  • Will give brainliest
    15·2 answers
  • When the economy is at equilibrium, a) inventories must equal zero. B) there are no leakages. C) leakages equal aggregate demand
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!