Answer:
Expected return = 21.9
%
Explanation:
<em>The capital asset pricing model is a risk-based model. Here, the return on equity is dependent on the level of reaction of the the equity to changes in the return on a market portfolio. These changes are captured as systematic risk. The magnitude by which a stock is affected by systematic risk is measured by beta</em>.
Under CAPM, Ke= Rf + β(Rm-Rf)
Rf-risk-free rate (long-term i.e 10 year treasury bill rate), β= Beta, Rm= Return on market., Ke- Return on equity (cost of equity)
This model can be used to work out the cost of equity as follows:
Ke= Rf + β (Rm-Rf)
Rf- 5%, β= 1.3, Rm- 18, E(r)- ?
Ke = 5% + 1.3×(18-5)%=21.9
%
Ke = 21.9
%
Expected return = 21.9
%
Answer:
As of December 2019, the total amount of currency in the US economy was $1,700 billion, while total checkable deposits as of December 2019 was $2,300 billion.
Explanation:
Total M1 money supply in the US economy as of December 2019 was $4 trillion (as stated by the federal reserve)
M1 money supply includes checkable deposits, paper bills and coins (currency) and travelers' checks.
Answer:
Number of year = 10 year
Explanation:
Given:
Principal = $1,500
Rate of interest = 10% = 0.1
Amount = 2 × Principal = 2 × $1,500 = $3,000
Interest = Amount - Principal = $3,000 - $1,500 = $1,500
Find:
Number of year = ?
Computation:
⇒ Interest = Principal × Rate of interest × Number of year
⇒ $1,500 = $1,500 × 0.1 × Number of year
⇒ $1,500 = $150 × Number of year
⇒ Number of year = $1,500 / $150
⇒ Number of year = 10 year
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Answer:
0.56
Explanation:
Opportunity cost refers to the alternative forgone from a list of preference. It is a concept in economics developed as a result of the scarce resources available to satisfy unlimited wants.
Since the family can afford either 80 cans of beans or 45 frozen dinners.
it means that for every 1 can of beans purchased, 45/80 frozen dinner will be let go or not be purchased. Also, for unit of frozen dinners purchased, the family sacrifices the purchase of 80/45 cans of beans.
Hence the opportunity cost of a can of beans in terms of frozen dinners in the time frame
= 45/80 frozen dinner
= 0.5625
to 2 decimal place = 0.56
