<u>Solution and Explanation:</u>
Amount realized 22,000 Minus: Basis 89,000 Loss recognized 67000
<u>answer a </u>) Since Karen is single she can guarantee this lose as a common misfortune to a limit of $50,000. Karen won't have the option to guarantee the whole $67,000 that she lost she can just guarantee $50,000.
<u>answer b) </u>Since Karen is recording a joint government form she can guarantee a lose of upto $100,000. Karen will have the option to guarantee the whole loss of $67,000.
<u>answer c )</u> With the stock being bought from another investor as opposed to the sorting out enterprise she can guarantee the whole loss of $67,000 as a captial gain misfortune.
<u>answer d )</u> B. By selling a segment of the stock in one year and the staying stock in one more year Karen could change over the whole misfortune on the deal to a normal misfortune.
Anything is possible if you believe!!!
Answer:
D. varying risk premiums
Explanation:
Fama and French has a total of three factors considered in the study:
Size of firms, book to market values, and the additional return on the market.
For all these market anomalies the study is based on the varying risk premiums assigned.
As for the market efficiency the out performance is explained by the risk and value that is of small stocks due to high cost of capital associated, and with that there is great business risk also associated.
Answer:
a. The return predicted by CAPM for a portfolio with a beta of 1.4 is 11.88%
b. The alpha of portfolio A is -3.68%
Explanation:
The formula for computing the return by Capital Assets Pricing Method (CAPM) model.
Expected return = Risk Free rate + (Beta × Market Risk Premium)
where,
Market risk premium = market return - risk free rate
Now, putting the values in the above equation
a. Expected return = 0.06 + 1.4 × (0.102 - 0.06)
= 0.06 + 1.4 × 0.042
= 0.06 + 0.0588
= 0.1188
= 11.88 %
Thus, the return predicted by CAPM for a portfolio with a beta of 1.4 is 11.88%.
b. The alpha should be = Portfolio expected return - expected return
= 8.20 - 11.88 %
= -3.68%
Thus, the alpha of portfolio A is -3.68%
Answer:
Donations to charitable organizations are tax deductible.
Explanation:
The government see charitable organizations similarly as they view welfare programs , since it allocates a certain amount of wealth from the rich to the poor. This is why most countries in the world will allow charitable donations as tax deductible.
That being said, research conducted by Oxfam report actually showed that Companies actually use this rule as a loophole to escape tax payment. Their finding indicates that between 2008 -2014 alone, US corporations has use this loophole to hide around $1.4 Trillion worth of Taxes.
