Answer:
Helps understand what your product or service can offer to your customers. Helps plan a successful product offering. Helps with planning, developing and executing effective marketing strategies. Helps businesses make use of their strengths and avoid unnecessary costs.
Explanation:
Expected return of the stock is greater than 12%.
Using formula, Risk free rate + beta (market risk rate - risk free rate)\
= 2% + 2.0 (7%-2%)
= 13.6 - 0.4* risk premium
Risk premium of a stock is greater than 12%.
A stock's total return takes into account both capital gains and losses as well as dividend income, as opposed to a stock's nominal return, which only displays its price movement. In addition to considering the actual rate of return, investors should consider their ability to withstand the risk involved with a given investment. An investment's return on investment (ROI) provides a general indication of its profitability. The return on investment (ROI) is calculated by subtracting the investment's initial cost from its final value, dividing the result by the cost of the investment, and finally multiplying the result by 100.
Note that the full question is:
If the market risk premium is 7%, the risk-free rate is 2% and the beta of a stock is 2.0, what is the expected return of the stock?
A. less than 12%.
B. 12%.
C. greater than 12%.
D. cannot be determined.
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The income elasticity in this case is 1.
<u>Explanation:</u>
In Economics, the income elasticity of demand gauges the responsiveness of the amount requested for a decent or administration to an adjustment in income. It is determined as the proportion of the rate change in amount requested to the rate change in pay.
Income Elasticity of Demand (YED) is characterized as the responsiveness of interest when a purchaser's salary changes. It is characterized as the proportion of the adjustment in amount requested over the adjustment in salary.
Answer:
Equals the foreign exchange rate minus the inflation rate.
Explanation:
Nominal rate of interest refers to the interest rate which does not account for rate of inflation.
It is expressed as
Nominal interest rate = Real interest rate + rate of inflation
Real interest rate is considered to be a better measure since it is adjusted for rate of inflation.
Foreign exchange rate refers to exchange rate between two currencies which is based upon inflation and interest rates prevailing in the respective countries.
Answer:
.A. knowledge
Explanation:
Business knowledge refers to an entrepreneur's understanding of customers' preferences, staff skills, business operations and processes, and overall market trends. When expertly gathered, business knowledge is an essential reference point for decision making. The information is useful for continued business growth and identification of new opportunities.
Market research is one way of gathering knowledge. Before the study, David appeared to be unaware of his customer preferences. Lack of business knowledge can lead to the loss of customers and the collapse of a business. Business owners can also gain knowledge through employee and supplier networks.
