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GarryVolchara [31]
3 years ago
6

A stock has an expected return of 11 percent, its beta is 1.20, and the risk-free rate is 4.4 percent. What must the expected re

turn on the market be
Business
1 answer:
Drupady [299]3 years ago
3 0

Answer:

Expected market return = 9.8%

Explanation:

The expected return on the market can be worked out using the Capital Asset Pricing Model.

<em>The capital asset pricing model is a risk-based model. Here, the return on equity is dependent on the level of reaction of the the equity to changes in the return on a market portfolio. These changes are captured as systematic risk. The magnitude by which a stock is affected by systematic risk is measured by beta. </em>

Under CAPM, Ke= Rf + β(Rm-Rf)

Rf-risk-free rate (treasury bill rate)- 4.4%

β= Beta - 1.20

Rm= Return on market.- ?

Applying this model, we have

11%= 4.4%+ (R-4.4%)×1.20

0.11-0.044= 1.20×(R-0.04)

0.07 = 1.20R-0.048

Collect like terms

0.07+0.048 = 1.2R

Divide both sides by 1.20

R= (0.07+0.048)/1.20

R=9.83%

Expected market return = 9.8%

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The given statement exists true.

The diameter of the efferent arterioles in the glomerulus decreased while

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<h3>What would happen if the diameter of the efferent arterioles in the glomerulus decreased?</h3>
  • The net pressure of filtration will drop.
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The approaching (afferent) arteriole has a larger diameter than the outgoing (efferent) arteriole (by which blood leaves the glomerulus). The difference in diameter between the entering and leaving arterioles causes the blood pressure inside the glomerulus to rise.

The blood components are forced out of the glomerular capillaries by elevated blood pressure. Glomerular filtration is hindered and slows down if the diameter of the efferent arteriole exceeds that of the afferent arteriole. Without the real pressure gradient, it is also impossible to filter out all the components.

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5 0
2 years ago
each of the following inventors developed machinery that would lead to the increased productivity of farmers between 1790 and 18
xenn [34]
<span> c) Samuel Morse becasue he the only person

</span>
3 0
3 years ago
Which statement(s) most directly apply to capitalism? i. there is heavy government regulation of industry. ii. individuals can s
Kisachek [45]

The most directly applied sentence for capitalism is the price and availability of goods are determined primarily by the market. As the market is a free market in the economy.

<h3>What is Capitalism?</h3>

Capitalism is commonly thought of as an economic system in which private actors own and control the property.

According to their own interests, demand and supply freely set market prices in ways that benefit society.

 

Thus, option D which is iii only is correct.

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3 0
2 years ago
If a new home can be constructed for $150,000, what is the opportunity cost of federal defense spending, measured in terms of pr
FrozenT [24]

Answer:

4 million  houses

Explanation:

Opportunity cost is the forfeited benefit as a result of choosing one option over others.  Its value equals the cost of the next best alternative.

The cost of constructing a new home is $150,000.  If the Federal Defence has a budget of $600 billion, the opportunity cost of spending that amount will be the equivalent number of units that can be built by the amount.

To calculate the number of units= $600 billion divided by $150,000

= $600,000,000,000/ $150,000

=4,000,000

=4 million units

6 0
3 years ago
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r-ruslan [8.4K]

Answer

The classification is shown below:

Explanation:

The saving refers to the amount i.e above its consumption expenditure let us take an example if an individual salary is $100,000 and its expenditure assumes $50,000 then it saves $50,000 so the $50,000 is the savings.  While the investment is the amount that is spent to buy some assets in terms of building, machinery, home, etc.

So the classification is presented below:

a. Kyoko borrows money to build a new lab for her engineering firm.  = Investment

b. Rina purchases stock in Nano Speck, a biotech firm.  = saving

c. Musashi takes out a mortgage for a new home in Detroit. = investment

d.Jacques purchases a corporate bond issued by a car company. = saving

6 0
3 years ago
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