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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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adell [148]

Answer:

Lucky event

Explanation:

In the investments market a true measure of market efficiency is to get a track record of positive outcome from investors over time.

The lucky event problem occurs when an investor makes a profit on investment not because of how efficient a market is or by a logical procedure, but rather by chance.

In the given scenario Keyes put all his money in one stock that doubled in 3 months.

However this was not replicated among other investors who made similar vets on other stocks and lost.

This is an exams of lucky event problem in determining market efficiency.

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3 years ago
Prepare adjusting entries for the following transactions.
g100num [7]

Answer:

1. Debit Depreciation expense  $1,340

  Credit Accumulated depreciation  $1,340

2. Debit Interest expense  $275

   Credit Accrued Interest  $275

3. Debit Supplies expense  $450

   Credit Supplies Account  $450

4. Debit Unearned Service revenue  $3,100

   Credit Service revenue  $3,100

5. Debit Salaries expense  $900

   Credit Accrued Salaries  $900

Explanation:

Depreciation is the systematic allocation of the cost of an asset to the income statement over the estimated useful life of that asset.

It is determined as the depreciable value of the asset over the estimated useful life of the asset where the depreciable value is the difference between the cost and salvage value of the asset

Mathematically,  

Depreciation = (Cost - Salvage value)/Estimated useful life

It is recorded by debiting depreciation and crediting accumulated depreciation.

When interest is incurred as an expense but yet to be paid, it will be accrued for by Debiting Interest expense and crediting accrued Interest. The same applies to salaries incurred but yet to be paid.

When Supplies is purchased, Debit supplies and credit Cash/Accounts payable. As Supplies are used up, debit supplies expense (with the amount used) and Credit Supplies account.

Amount of supplies used up = $550 - $100

= $450

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Debit Cash account and Credit Unearned fees or deferred revenue.

As the service is performed and the revenue is earned, debit Unearned fees and credit revenue.

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ratelena [41]
Twitter allows companies<span> to promote their products in short messages known as tweets limited to 140 characters, therefore, the answer that would best complete the given statement above would be option B. </span>Twitter allows companies to reach consumers with s<span>hort, personal messages. Hope this answers the question.</span>
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3 years ago
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Answer:

A

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If South Dakota's governor reports a budget surplus in 2011, that state government likely:
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