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3 years ago

If the market risk premium increased to 6%, what would happen to the stock's required rate of return

Business

1 answer:

Inessa [10]3 years ago

7 0

Answer:

13%

Explanation:

As per the situation the solution of required rate of return first we need to find out the beta which is shown below:-

Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)

11% = 7% + Beta × 6%

Beta = 1

now If the market risk premium increased to 6% so,

The required rate of return = 7% + 1 × 6%

= 13%

Therefore for computing the required rate of return we simply applied the above formula.

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Choose the correct way to complete the sentences to explain how to draw concentric circles when doing a freehand sketch.

taurus [48]

1st one is "extended tripod grip" and second one is "rotating the paper with your free hand and pulling it towards your body".

4 0

3 years ago

A bottling operation has a mean fill level of 10.01 ounces with a standard deviation of 0.25 ounces. Random samples of 20 bottle

MAVERICK [17]

Answer:

The upper limit is 10.1

The lower limit is 9.91

Explanation:

Given that:

The mean fill level (μ) = 10.01 ounces,

Standard deviation (σ) = 0.25 ounces

Number of sample bottles (n) = 20

The limits of the sample mean = 92% = 0.92

α = 1 - 0.92 = 0.08

$\frac{\alpha}{2}=0.04$

The z value of 0.04 is the same as the z value of 0.46 (0.5 - 0.04). From the probability distribution table:

$z_{\frac{\alpha}{2}}=z_{0.04} = 1.75$

The margin of error (e) is given by:

$e=z_{0.04}\frac{\sigma}{\sqrt{n} }=1.75*\frac{0.25}{\sqrt{20} } =0.1$

The upper limit = μ + e = 10.01 + 0.1= 10.1

The lower limit = 10.01 - 0.1 = 9.91

6 0

3 years ago

3. During Michael Jordan's NBA career (

mojhsa [17]

Answer:

7324

Explanation:

We need to find the number of completed free throws out of total free throws

Since he completed 83.5% of them, you find 83.5% of 8772

83.5% can be rewritten as 0.835

$8772 \times 0.835 = 7324.62$

We don't round up because it isn't 1 complete free throw. 0.62 is not 1 complete free throw so round down

3 0

2 years ago

If the nominal interest rate is 7 percent and the real interest rate is -2.5 percent, then the inflation rate is Group of answer

madreJ [45]

Answer:

Inflation = 9.5%

Explanation:

Inflation can be defined as the persistent general rise in the price of goods and services in an economy at a specific period of time.

Given the following data;

Nominal interest rate = 7 percent.

Real interest rate = -2.5 percent

Real interest rate = Nominal interest rate - Inflation

Inflation = Nominal interest - Real interest rate

Inflation = 7 - (-2.5)

Inflation = 9.5%

4 0

3 years ago

A disadvantage of the corporate form of business ownership is that:

Roman55 [17]

Answer:

b) most shareholders have little direct control over how the company is managed.

4 0

3 years ago