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Serga [27]
3 years ago
6

Stock A has a beta = 0.8, while Stock B has a beta = 1.6. Which of the following statements is CORRECT?a. If the risk-free rate

increases but the market risk premium remains constant, the required return on Stock A will increase by more than that on Stock B.b. If the marginal investor becomes more risk averse, the required return on Stock B will increase by more than the required return on Stock A.c. Stock B's required return is double that of Stock A's.d. If the marginal investor becomes more risk averse, the required return on Stock A will increase by more than the required return on Stock B.e. An equally weighted portfolio of Stocks A and B will have a beta lower than 1.2.
Business
1 answer:
Sveta_85 [38]3 years ago
8 0

Answer:

a.

Explanation:

Correct option is > a. If the marginal investor becomes more risk averse, the required return on Stock B will increase by more than the required return on Stock A.

Reason: Required rate Stock B will increase so that to attract new investors for stock B and make returns more rational against associated risk.

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3 years ago
A small craft store located in a kiosk expects to generate annual cash flows of $6,800 for the next three years. At the end of t
Dafna11 [192]

Answer:

The monetary value is $24,201.23

Explanation:

Giving the following information:

Cash flows:

Year 1= $6,800

Year 2= 6,800

Year 3= 6,800

Year 4= $15,000.

The discount rate is 15 percent.

We need to discount each cash flow to the present value:

PV= FV/(1+i)^n

Year 1= 6,800/1.15= 5,913.04

Year 2= 6,800/1.15^2= 5,141.78

Year 3= 6,800/1.15^3= 4,471.11

Year 4= 15,000/ 1.15^4= 8,576.30

Total= $24,201.23

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3 years ago
What action is key to success in online learning?
BabaBlast [244]

Studying. Never stop studying, going over your work twice, and double checking.

3 0
3 years ago
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¿Qué documentos en el Archivo son productos de una actividad Administrativa, comercial y política de una sociedad?
Lena [83]

Answer:

Explanation:

A training program that teaches people how to locate, maintain, preserve, and make long-term records usable for documentation, legal, analysis, and other purposes.

5 0
3 years ago
The Bureau of Labor Statistics counts as employed people who work part-time, but would prefer to work full-time. Suppose the peo
Dafna1 [17]

Answer:

The labor participation rate would not change because it counts the labor force as a percentage of the total adult population, and the labor force includes both the number of people employed and the number of people unemployed, so, even if those working part-time were counted as unemployed by the BLS, they would still be part of the Labor Force.

The labor participation rate formula is:

Labor Participation Rate = (Labor Force / Total Adult Population) x 100

The unemployment rate would indeed change, because it counts the number of unemployed as a percentage of the labor force. If those working part-time were counted as unemployed by the BLS, the number of people unemployed would obviously spike.

The formula is:

Unemployment Rate = (Number of Unemployed / Labor Force) x 100

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3 years ago
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