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vlabodo [156]
3 years ago
11

The risk premium for exposure to aluminum commodity prices is 4%, and the firm has a beta relative to aluminum commodity prices

of .6. The risk premium for exposure
to GDP changes is 6%, and the firm has a beta relative to GDP of 1.2. If the risk-free rate is 4%, what is the expected return on this stock?

A.
14.4 percent

B.
10.0 percent

C.
13.6 percent

D.
11.5 percent Please show work
Business
1 answer:
sp2606 [1]3 years ago
5 0

Answer:

C.  13.6 percent

Explanation:

In this question, we apply the Capital Asset Pricing Model (CAPM) formula which is shown below

Expected rate of return = Risk-free rate of return + Beta × risk-free rate of return + Beta × market risk premium

= 4% + 0.6 × 4% + 1.2 × 6%

=  4% + 2.4% + 7.2%

= 13.6%

The (Market rate of return - Risk-free rate of return)  is also known as market risk premium

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Answer:

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Explanation:

In simple words, A value system refers to the graphical representation of the technological and social tools and how they are used within / around organisations. The points represent the public in a network of values. The entities are linked by means of connections representing goals and objectives. These outputs may be objects, information or income.

4 0
2 years ago
Which of the following explanations resolve the Leontief paradox?a. Leontief assumed that U.S. and foreign technologies were the
mafiozo [28]

Answer:A. Leontief assumed that U.S. and foreign technologies were the same, while the Heckscher-Ohlin model assumes they are different

B. Leontief ignored land abundance in the United States

D. Leontief’s test distinguished between skilled and unskilled labor, but ignored capital.

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in economics tries to explain that a country with a higher capital per worker has a lower Capital per labor ratio in export than when compared to Import.

LEONTIEF IGNORED THE ABUNDANCE OF LAND IN MAKING HIS ASSUMPTIONS

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LEONTIEF THEORY IGNORED CAPITAL DURING HIS TEST.

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3 years ago
Partial balance sheets and additional iformation are listed below for Sowell Company.
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Answer and Explanation:

The preparation of the operating activities section is presented below

Cash Flows from operating activities

Net Income $88,000

Adjustment made for non cash items:                  

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Add: Decrease in Account Receivable $15000 ($70,000 - $85,000)

Less: Increase in Inventory   $(5000) ($40,000 - $35,000)

Less: Decrease in accounts payable   $(8000) ($54,000 - $62,000)

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How many slides would be in a PowerPoint presentation based on the formatting of the Word outline?
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