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hichkok12 [17]
2 years ago
5

The​ risk-free rate is 3.4​% and you believe that the​ S&P 500's excess return will be 11.9​% over the next year. If you inv

est in a stock with a beta of 1 ​(and a standard deviation of 30​%), what is your best guess as to its expected excess return over the next​ year?
Business
1 answer:
VashaNatasha [74]2 years ago
5 0

Answer:

So since our Risk was "1.2 times" to the Risk of Market Hence Out Expected Return would also be 1.2 times.

Explanation:

Before Answering the Question , let us Understand some Important terms in simple language :

Market Excess Reture : it is basically that how much Market Return will be "Over & Above" Riskfree Rate

Beta : it shows that How much times is Risk of Our Stock in Comparison to that of Market . So We would be Expecting "that much times" Excess Return from that of "Market Excess Return"

?Now in Our Question it is Given that

Expected Excess Market Return (Rm - Rf) over next year = 11.9%

Beta of pur Stock = 1.2

\therefore Our Expected Excess Return over next year = Beta * Expected Excess Market Return

= 1.2 * 11.9%

= 14.28 %

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Carter Co. sells two products, Arks and Bins. Last year Carter sold 14,000 units of Arks and 56,000 units of Bins. Related data
Oliga [24]

Answer:

Carter Co.'s break-even point in units was 40000 units.

Explanation:

Total units sold = 14000 + 56000

                          = 70000

Weight of ark = 14000/70000

                      = 0.20  

weight of bins = 1 -0.20

                        = 0.80

weighted average contribution = (40 *0.20 ) + (20 *0.80 )  

                                                    = 8+ 16  

                                                    = $ 24 per unit

Break Even Point (Units) = Fixed cost /weighted average contribution

                   = 960,000 / 24  

                   = 40000 units

Therefore, Carter Co.'s break-even point in units was 40000 units.

3 0
3 years ago
Comparative advantage is the ability to convince others of the best choices to make in their own self-interest. perform an activ
Ira Lisetskai [31]

Answer:

The correct answer is letter "B": perform an activity at a lower opportunity cost.

Explanation:

Comparative advantage is the ability of an individual, company, or country to produce a good or service at a lower opportunity cost than its competitor. Having a comparative advantage does not mean that one entity is absolutely better than another at producing a good or service. It means that it sacrifices less to do so.

3 0
3 years ago
Flint Inc. has decided to purchase equipment from Central Michigan Industries on January 2, 2017, to expand its production capac
ddd [48]

Answer:

Please see the answers below:

Explanation:

1.

Debit: Equipment         $912,000

Credit: Notes Payable                 $912,000

To record purchase of equipment at zero interest bearing note Central Michigan.

2.

Debit: Notes Payable        $182,400

Debit: Interest Payable      $20,064

Credit: Cash                                     $202,464

To record Cash Payment of 1st year Installment and Interest.

3.

Debit: Notes Payable        $182,400

Debit: Interest Payable      $20,064

Credit: Cash                                     $202,464

To record Cash Payment of 2nd year Installment and Interest.

4.

Debit: Depreciation Expense          $91,200

Credit: Accumulated Depreciation               $91,200

To record Depreciation Expense on Equipment over the life of 10 years with no salvage value. (Straight Line Depreciation is employed).

6 0
3 years ago
If the mortgage loan is 80% of the appraised value of a house, and the interest rate of 8% amounts to $460 interest for the firs
irga5000 [103]

The appraised value of the house is after calculating interest and the value is $86,250.

<h3>What is appraised value?</h3>

A qualified appraiser or valuer's assessment of the assessed value of the real property is what is meant by an appraised value or mortgage valuation. It is typically utilized as a pre-qualification criterion and risk-based pricing component in connection with a financial institution's issuance of mortgage loans.

Calculation of appraised value of the house:

  1. First, calculate the yearly interest. $5,520 in interest total every year ($460 x 12).
  2. Take a loan for $69,000 at an interest rate of.08 on $5,520.
  3. Next, subtract $86,250 from $69,000 to get the appraised value.

Hence, the total appraisal value is $86,250.

Learn more about appraised value :

brainly.com/question/21507493

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6 0
1 year ago
On July 1, Stan, a steel manufacturer, telephoned Byron and offered to sell Byron six carloads of steel at $600 a ton. Byron sai
Viktor [21]

<u>Explanation:</u>

In the given case it is valid contract as there is time, promise, benefit and obligation to do thing. But verbal contracts are difficult to prove. Stan and Byron have a verbal contract which is a promise for 10 days and the contract has exchange of goods for $600. Offer is made by Byron but the acceptance is not yet given by Stan.

Here only the offer is made and it is not yet accepted by Byron. here Stan has revoked the offer through letter so the revoke has been communicated to the other party through letter. So in this case there is no breach of contract as the contract was clearly revoked by Stan through his letter.

7 0
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