Answer:
1. Nature of commodity
2. Availability of substitutes
3. Income level
4. Postponement of consumption
5. Number of uses
6. Share in total Expenditure
7. Time period
Explanation:
Answer:
Risk-free rate = 8%
Explanation:
<em>The Capital Asset pricing Model (CAPM) can be used to determined the beta. </em>
<em>According to the Capital Asset pricing Model the return on equity is dependent on the level of reaction of the the equity to changes in the return on a market portfolio.</em>
<em> 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 (treasury bill rate), β= Beta, Rm= Return on market.
Using this model, we can work out the risk free rate as follows:
DATA
Ke-20%
Rf- ?
β-1.2
Rm- 18%
substituting, we have
0.2= Rf + 1.2× (0.18-Rf )
0.2 = Rf + 0.216
- 1.2Rf
collecting like terms
1.2Rf-Rf= 0.216 - 0.2
0.2Rf = 0.016
Dividing both sides by 0.2
Rf =0.016/0.2=0.08
Rf = 0.08
× 100 = 8%
Risk-free rate = 8%
Based on the information given the variance is $500 favorable.
<h3>
Variance</h3>
Using this formula
Variance=Fixed Direct labor cost-Actual direct labor cost
Where:
Fixed Direct labor cost=$27,500
Actual direct labor cost=$27,000
Let plug in the formula
Variance=$27,500-$27,000
Variance=$500 favorable
Inconclusion the variance is $500 favorable.
Learn more about variance here:brainly.com/question/25639778
<span>Though leaders have been consistently avoiding
economic crisis, there are still some unavoidable events that cause a lot of
negative effect to the citizens. One of them is stagflation which is constituted
from high unemployment along with high inflation.</span>