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9966 [12]
3 years ago
8

Stock A has a beta of 0.8, Stock B has a beta of 1.0, and Stock C has a beta of 1.2. Portfolio P has equal amounts invested in e

ach of the three stocks. Each of the stocks has a standard deviation of 25%. The returns on the three stocks are independent of one another (i.e., the correlation coefficients all equal zero). Assume that there is an increase in the market risk premium, but the risk-free rate remains unchanged. Which of the following statements is correct? Answers: a-The required returns on all three stocks will increase by the amount of the increase in the market risk premium. b-The required return on Stock A will increase by less than the increase in the market risk premium, while the required return on Stock C will increase by more than the increase in the market risk premium. c-The required return of all stocks will remain unchanged since there was no change in their betas. d-The required return on the average stock will remain unchanged, but the returns of riskier stocks (such as Stock C) will decrease while the returns on safer stocks (such as Stock A) will increase. e-The required return on the average stock will remain unchanged, but the returns of riskier stocks (such as Stock C) will increase while the returns of safer stocks (such as Stock A) will decrease.
Business
1 answer:
Marat540 [252]3 years ago
5 0

Answer:

b-The required return on Stock A will increase by less than the increase in the market risk premium, while the required return on Stock C will increase by more than the increase in the market risk premium.

Explanation:

Beta reflects the risk associated, as the beta is low, the expected risk is also low, accordingly return expected is also keeping all things constant.

When Beta is less than 1 it means the returns will be lower than market, accordingly for Stock A the return will increase but slower than the market risk.

Whereas, the Beta is more than 1 of Stock B and accordingly the risk is more but return will grow even faster as the risk volatility is high than the market risk.

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Two types of value that are often contrasted are subjective value and: Group of answer choices A. inherent value B. reproduction
Ilia_Sergeevich [38]

Answer:

The correct answer is letter "C": objective value.

Explanation:

Subjective values are those provided by individuals based on their <em>beliefs, perceptions, ideas, feelings, </em>and <em>reflections</em>. Subjective values are biased. Objective values, on the other hand, are based on <em>facts, statistics, evidence, </em>and <em>observations</em>. Objective values are unbiased.

6 0
3 years ago
How are manufacturers trying to reverse or counteract the negative environmental impacts of manufacturing? (Select all that appl
zzz [600]

The manufacturers are trying to counteract the negative environmental impacts of manufacturing by:

  • reducing and eliminating waste
  • establishing green initiatives

<h3>How does manufacturing affect the environment?</h3>

The emission of carbon and waste from the manufacturing plant plays a part in the concentration of greenhouse gases on earth.

However, the manufacturers are adopting the process of reducing & eliminating waste and establishing green initiatives to minimize its pollution of the environment.

Therefore, the Option B and E is correct.

Read more about environmental impact

<em>brainly.com/question/27080910</em>

8 0
2 years ago
Warnes Motors' stock is trading at $20 a share. Three-month call options with an exercise price of $20 have a price of $1.50. Wh
jek_recluse [69]

Answer:

B. The price of the call option will increase by less than $2, but the percentage increase in price will be more than 10%.

Explanation:

Given

Trading price = $20

Exercise price of call option = $20

Call option price = $1.50

Price increment = 10% to $22

It's not be noted that the discounted present value of a price of an option is represented by its expected payoff.

An increment of $2 in stock price attracts an increment of more than $2 in the payoff option.

Having highlighted that, it's also to be noted that the increment in expected payoff will be by an amount less than $2 and same with present value because the possibility is less than 1. So, the price of the option will increase by less than $2.

Moving to the percentage increase;

This will be larger than 10%.

This is because when stock price increases by 10%, the value of the option will increase by more than 10%.

8 0
3 years ago
There are 12 general categories of threat to an organization's people, information, and systems. List at least six of the genera
Alenkinab [10]

Answer:

1. Human Error: an example is disregard to safety measures.

2. Compromises to Intellectual Property: an example is piracy of an organization's product.

3. Forces of Nature: an example is earthquake.

4. Information extortion: an example is coercion or blackmail.

5. Quality of service deviation: an example is an epileptic or poor power supply.

6. Industrial espionage: an example is unethical hacking of data.

Explanation:

A threat to an organization's people, information, and systems is basically any circumstances or events that poses a potential danger, damage or adverse affect to its smooth running.

These threats can be classified into six (6) categories and these are;

1. Human Error or failure: this are errors that arise as a result of having incompetent employees (slips and lapses) or mistakes stemming from the workers. <em>An example of human error is an employee that disregard safety measures. </em>

2. Compromises to Intellectual Property: this usually occurs when an intellectual property is stolen illegally from an organization. <em>An example is piracy of an organization's product.</em>

3. Forces of Nature: this is usually caused by a natural disaster. <em>Examples of forces of nature are flood, earthquake, fire etc. </em>

4. Information extortion: this arises when sensitive data about an organization is held through <em>coercion, bribery or computer hacking</em>.

5. Quality of service deviation: this would occur when there's a shortage in the quality of service received by an organization, contrary to what is expected or required. <em>Examples are poor power supply, poor internet service etc. </em>

6. Industrial espionage: this is as a result of loosing sensitive data to <em>unauthorized individuals or hackers.</em>

7 0
3 years ago
A corporation is a type of partnership that?
NeTakaya
That has share holders and a board of directors.
3 0
3 years ago
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