1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
hichkok12 [17]
3 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]3 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 %

You might be interested in
Suppose you have three choices as to what to do for two hours on Sunday afternoon: work around the house, earning $3.50 an hour;
kobusy [5.1K]

Answer:

the opportunity cost is in the case when you choose to go to the movies is $20

Explanation:

The computation of the opportunity cost is in the case when you choose to go to the movies is shown below:

= Earning per hour × number of hours

= $10 × 2 hours

= $20

Hence, the opportunity cost is in the case when you choose to go to the movies is $20

5 0
2 years ago
On june 8, williams company issued an $80,000, 5%, 120-day note payable to brown industries. assuming a 360-day year, what is th
lidiya [134]

To calculate the maturity of this note,

we use a simple formula first to get the interest which is:

I = Principal (amount owed) X Interest Rate (%) X Time (length of loan)

The days is only divided by only 360 days instead of 365 days. This is because commercial loans often use 360-day calendar years instead of 365-day calendar years. But not all banks used this as their calendar year,

 

I = Prt

= ($80000) (0.05) (120/360)

= ($80000) (0.01666666666)

I = $ 1,333.33

 

To get the maturity value, the formula is: M = Interest + Principal

M = I + P

= $1,333.33 + $80,000

= $81,333.33 or $81,333, letter C

7 0
3 years ago
_____ tend to move in anticipation of the business cycle, turning up in anticipation of recovery and turning down at signs of ec
pogonyaev
Capital goods tend to move in anticipation of the business cycle, turning up in anticipation of recovery and turning down at signs of economic weakness.
7 0
3 years ago
At the beginning of Year 2, Oak Consulting had the following normal balances in its accounts:
kvv77 [185]

Answer:

    Cash                                                  Accounts receivable

    debit              credit                          debit              credit

    42,000                                              25,000

c.  140,000                                       a.   185,000

d.                        120,000                 <u>c.                         140,000</u>  

<u>e.                        31,400   </u>                      70,000

    30,600

    Service revenue                               Accounts payable

    debit              credit                          debit              credit

a.                         185,000                                            8,400

    <u>185,000                       </u>                b.                        45,800

       0                     0                        <u>e.   31,400                      </u>

                                                                                    22,800

    Common stock                                 Retained earnings

    debit              credit                          debit              credit

   <u>                        24,000</u>                                              34,600

                           24,000                  f.   10,000

                                                              <u>                        19,200</u>

                                                                                      43,800

    Operating expenses                        Salaries expenses

    debit              credit                          debit              credit

b.  45,800                                         d.  120,000                  

<u>                            45,800</u>                       <u>                      120,000</u>

       0                      0                                  0                    0                      

in order to determine the balance of the retained earnings account at the end of the year, we must first close all the temporary accounts:

Dr Service revenue 185,000

    Cr Income summary 185,000

Dr Income summary 165,800

    Cr Operating expenses 45,800

    Cr Salaries expense 120,000

Dr Income summary 19,200

    Cr Retained earnings 19,200

6 0
3 years ago
Frederick is a student at Central Fictional State University (CFSU), and he has a great idea for a new business invention. Frede
Delvig [45]

Answer: He should should File a suit.

Explanation:

He should should File a suit.

The new innovation was Frederick's brain child, I believe God gave him this innovative Idea he could change people's lives professionally and even personally. Frederick should only sue the Professors for the use of his innovative idea and the Patents for this innovation to be transferred back to the rightful owner of innovation (Frederick) and not to sue them for everything they have the aim here is to teach/show professors that stealing is wrong and  not to punish.

We should not let evil doers prevail, suing Professors will teach them a lesson that stealing a person's idea is wrong and they should not do it again, if Frederick doesnot sue the professors would probably do it to another student. Frederick's law suit will not only help him but it will actually save a lot of students coming after him which is what Christianity is teach us to do good for other people.

6 0
3 years ago
Other questions:
  • Reinforcement ,contact ,honesty and fair expection are
    15·2 answers
  • What are some traditional banking benefits??
    12·1 answer
  • Shahia Company bought a building for $73,000 cash and the land on which it was located for $107,000 cash. The company paid trans
    8·1 answer
  • Suppose that for a particular firm the only variable input into the product process is labor and that output equals zero when no
    10·1 answer
  • Greta is concerned that one of the potential market segments she has identified for her dog grooming service is too small and ha
    10·1 answer
  • The inventory data for an item for November are: Nov. 1 Inventory 20 units at $19 4 Sold 10 units 10 Purchased 30 units at $20 1
    6·2 answers
  • If net operating income is $34,000, average operating assets are $204,000, and the minimum required rate of return is 15%, what
    11·1 answer
  • Acme Corp. is conducting a business impact analysis for the threat of ransomware impacting its organization. The company determi
    6·1 answer
  • Multiple Choice
    7·1 answer
  • Suppose your roommate. Clara is starting à room cleaning business on your campus. There are five potential workers. Each is will
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!