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Juli2301 [7.4K]
3 years ago
11

While on a hike with a tour group in the mountains, Derek gets mauled by a bear. No previous reports of bears in the area had be

en made. Derek wants to hold the tour company liable for his injury. Which of the following is most likely true?
A. Derek cannot hold the tour company liable because there is no way to prepare for or avoid a bear attack.
B. The company is not at fault because it does not owe Derek a duty of care.
C. Because most people would not expect something as dangerous as a bear encounter while on a hike, an assumption of risk defense will probably not protect the tour company.
D. Derek assumed the risk of a bear attack by joining the tour group, so he cannot hold the tour company liable.
Business
1 answer:
wlad13 [49]3 years ago
4 0

Answer: D. Derek assumed the risk of a bear attack by joining the tour group, so he cannot hold the tour company liable

Explanation:

Derek has to accept that by joining the tour group, he assumed some the risk of some elements of danger amongst them the bear attack.

Even though there had been no prior attack by bears in the mountain, a mountain hike still has some inherent danger in it and this includes bears. He cannot hold the tour company liable using this reason alone.

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Determinants of market interest rates
ollegr [7]

Answer:

1. Real risk-free rate.

2. Nominal risk free-rate.

3. Inflation premium.

4. Liquidity risk premium.

5. Liquidity risk premium.

6. Maturity risk premium.

Explanation:

Market interest rates can be defined as the amount of interests (money) paid by an individual on deposits and other financial securities or investments. The factors that typically affect the market interest rate known as the determinant of market interest rates are;

1. This is the rate on short-term U.S. Treasury securities, assuming there is no inflation: Real risk-free rate r*

2. It is calculated by adding the inflation premium to r*: Nominal risk free rate.

3. This is the premium added to the real risk-free rate to compensate for a decrease in purchasing power over time: Inflation premium.

4. This is the premium added as a compensation for the risk that an investor will not get paid in full: Liquidity risk premium.

5. This premium is added when a security lacks marketability, because it cannot be bought and sold quickly without losing value: Liquidity risk premium.

6. This is the premium that reflects the risk associated with changes in interest rates for a long-term security: Maturity risk premium.

7 0
3 years ago
A. 17.2, B. 15.12 C.12% D. 18.7%
loris [4]

Answer:

Option (B) is correct.

Explanation:

Cost of Equity (Ke) = Rf + Beta ( Rp)

where,

Rf = risk free rate

Rp = Market risk premium

Hence,

Beta systematic risk :

= 7% + 1.7 (6%)

= 7% + 10.2%

= 17.2%

Post Tax cost of debt:

=  Kd ( 1 - T)

where,

Kd = cost of debt

T = tax rate

= 20% * (1-0.4)

= 12%

WACC = [ (Ke × We) + (Wd × Kd(1-T)) ]

where,

We = weight of equity

Wd = weight of debt

             = [(17.2% × 0.6) + (0.4 × 20% × (1 - 0.4))]

             = 10.32% + 4.80%

             = 15.12%

7 0
3 years ago
An investor can design a risky portfolio based on two stocks, A and B. Stock A has an expected return of 16% and a standard devi
ElenaW [278]

The proportion of the optimal risky portfolio that should be invested in stock A is 0%.

Using this formula

Stock A optimal risky portfolio=[(Wa-RFR )×SDB²]-[(Wb-RFR)×SDA×SDB×CC] ÷ [(Wa-RFR )×SDB²+(Wb-RFR)SDA²]- [(Wa-RFR +Wb-RFR )×SDA×SDB×CC]

Where:

Stock A Expected Return  (Wa) =16%

Stock A Standard Deviation (SDA)= 18.0%

Stock B Expected Return  (Wb)= 12%

Stock B Standard Deviation(SDB) = 3%  

Correlation Coefficient for Stock A and B (CC) = 0.50  

Risk Free rate of return(RFR) = 10%

Let plug in the formula

Stock A optimal risky portfolio=[(.16-.10)×.03²]-[(.12-.10)×.18×.03×0.50]÷ [(.16-.10 )×.03²+(.12-.10)×.18²]- [(.16-.10 +.12-.10 )×.18×.03×0.50]

Stock A optimal risky portfolio=(0.000054-0.000054)÷(0.000702-0.000216)

Stock A optimal risky portfolio=0÷0.000486×100%

Stock A optimal risky portfolio=0%

Inconclusion the proportion of the optimal risky portfolio that should be invested in stock A is 0%.

Learn more here:

brainly.com/question/21273560

6 0
2 years ago
Susanne, the CEO of a national IT manufacturer, was approached by Simple Phones, a new company that is marketing a new type of p
Anika [276]

Answer:

Bounded rationality

Explanation:

Decision making is an important aspect of every man, However good decision making is guided by a lot of principles

Bounded rationality mean that human rational at the point of decision making is limited . It can be further explained by the principle that a number of factors like the available information ,mindset and even time can limit the decision making capacity of an individual.

This best define the situation confronting Susanne in the scenario.

8 0
3 years ago
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Serjik [45]
She is a hostess because she greets people at the door
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