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Savatey [412]
3 years ago
15

Stock R has a beta of 2.5, Stock S has a beta of 0.25, the required return on an average stock is 10%, and the risk-free rate of

return is 3%. By how much does the required return on the riskier stock exceed the required return on the less risky stock
Business
1 answer:
Gnesinka [82]3 years ago
3 0

Answer:

Excess return=0.1575=15.75%

Explanation:

Given Data:

Stock R beta=2.5

Stock S beta=0.25

return on an average stock=10%

the risk-free rate of return=3%

Required:

Excess return=?

Solution:

Difference in beta=Stock R beta-Stock S beta

Difference in beta=2.5-0.25

Difference in beta=2.25

Market Premium= return on an average stock-the risk-free rate of return

Market Premium=10%-3%

Market Premium=7%

Excess return=Market Premium*Difference in beta

Excess return=7%*2.25

Excess return=0.07*2.25

Excess return=0.1575=15.75%

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What is the one-word term for a decrease in economic activity that could last for months or longer
Y_Kistochka [10]

Answer:

Recession.

Explanation:

Recession: It is defined as a gradual decline in economic activity as consumer and business spend a lesser amount of money in the market, which leads to a decline in the gross domestic product of the nation. If there is a decline in GDP for consecutive two quarters then it is an indicator that the economy is heading toward recession. It is also considered a business cycle contraction.

7 0
3 years ago
Mr. Henshaw, CEO of MBA Bank, decides that the organization needs to provide more convenient service to customers. He decides to
ANTONII [103]

Answer: unfreezing

Explanation:

The unfreezing stage of Lewis change process is being regarded as the first stage of change, and in this stage, an organization is being prepared and accept that change is inevitable and necessary and that existing status quo should also be broken.

This is illustrated in what Mr. Henshaw, CEO of MBA Bank did, by deciding that the organization needs to provide more convenient service to customers.

6 0
3 years ago
Travelwell manufactures and sells luggage and briefcases. Their marketing research indicates that durability is the attribute th
yan [13]

Answer:

a) true

Explanation:

When we are talking about building brand equity, we are talking about increasing our customers' perception and value of our brand or company's name. Building brand equity emphasizes the brand itself over any specific product or service that our company offers. E.g. Rolls Royce is the most luxurious car manufacturer in the world, and they built brand equity upon luxury in all its vehicles, not one specific car.

In this case, Travelwell is emphasizing a characteristic that should apply to all its product line, not just one specific type of luggage.

6 0
3 years ago
At the break-even point of 1000 units, variable costs are $60000, and fixed costs are $35000. How much is the selling price per
Mice21 [21]

Answer:

the selling price per unit is $95

Explanation:

The computation of the selling price per unit is shown below:

Selling price per unit is

= Total cost ÷ break even points

where,

Total cost is

= Variable cost +  fixed cost

= $60,000 + $35,000

= $95,000

And, the break even point is 1,000 units

So, the selling price per unit is

= $95,000 ÷ 1,000 units

= $95

Therefore, the selling price per unit is $95

6 0
4 years ago
Mark follows certain steps to access the supplementary readings for a course when using his organization's library management sy
andreev551 [17]

Answer:

product

Explanation:

  • Process management components of a library management system include rules, instructions, and guides on how to perform tasks on the system.
  • This is similar to the manual for electronic products, with detailed instructions on how to use the product effectively.

so correct answer is product

5 0
3 years ago
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