Answer:
13.61 %
Explanation:
We have these information to answer the question
Risk free rate = 5.25
Beta = 0.88
Future return on market = 14.75
The formula for required rate of return
= Risk free rate + [ Beta * (future return on market - risk free rate)]
= 5.25 + [0.88(14.75-4.62)]
= 5.25 + (12.98-4.62)
= 5.25 + 8.36
= 13.61%
Therefore the firm's required rate of return = 13.61 %
Thank you!
The most important to close project is clean up
Answer:
1. Giving employers the right and the necessary tools they need to make good business decisions that can improve the company's efficiency.
2. Reward outstanding achievements and encourage everyone to think outside the box as well as being productive.
3. Creating a challenging and interactive environment for everyone.
4. Inspiring everyone to do their best and let them know that they will certainly be rewarded.
Explanation:
Giving employers the right and the necessary tools they need to make good business decisions that can improve the company's efficiency. Reward outstanding achievements and encourage everyone to think outside the box as well as being productive. Creating a challenging and interactive environment for everyone. Inspiring everyone to do their best and let them know that they will certainly be rewarded.
The question is incomplete. Here is the complete question:
The following annual returns for Stock E are projected over the next year for three possible states of the economy. What is the stock’s expected return and standard deviation of returns? E(R) = 8.5% ; σ = 22.70%; mean = $7.50; standard deviation = $2.50
State Prob E(R)
Boom 10% 40%
Normal 60% 20%
Recession
30% - 25%
Answer:
The expected return of the stock E(R) is 8.5%.
The standard deviation of the returns is 22.7%
Explanation:
<u>Expected return</u>
The expected return of the stock can be calculated by multiplying the stock's expected return E(R) in each state of economy by the probability of that state.
The expected return E(R) = (0.4 * 0.1) + (0.2 * 0.6) + (-0.25 * 0.3)
The expected return E(R) = 0.04 + 0.12 -0.075 = 0.085 or 8.5%
<u>Standard Deviation of returns</u>
The standard deviation is a measure of total risk. It measures the volatility of the stock's expected return. The standard deviation (SD) of a stock's return can be calculated by using the following formula:
SD = √(rA - E(R))² * (pA) + (rB - E(R))² * (pB) + ... + (rN - E(R))² * (pN)
Where,
- rA, rB to rN is the return under event A, B to N.
- pA, pB to pN is the probability of these events to occur
- E(R) is the expected return of the stock
Here, the events are the state of economy.
So, SD = √(0.4 - 0.085)² * (0.1) + (0.2 - 0.085)² * (0.6) + (-0.25 - 0.085)² * (0.3)
SD = 0.22699 or 22.699% rounded off to 22.70%
Answer:
The opportunity cost of the time spent studying includes: 2) the benefit that could have been received at the street festival
Explanation:
The cost of opportunity is the alternative that you sacrifice when you choose an option. It represent the <u>benefits that you misses out</u> on when choosing one alternative over another.
In this case, the cost of opportunity is the benefit that could have been received at the street festival, because that is the option you leave behind.
Earning a high score on your midterm is the product of your decision
