Answer:
<em>Regression Analysis</em>
Explanation:
Regression analysis <em>is a strong statistical approach for evaluating the relation among two or more important variables. </em>
Although there are many forms of regression analysis, they all analyze the effect on a dependent variable of one or more independent variables at their core
Answer:
anti freeze or water
Explanation:
could be either one just depends on the context
Answer:
Projects W and X have lower expected returns
Projects Y and Z have higher expected returns
Explanation:
Given
Solving (a): Compare the expected return of each project to 12.1%
Expected Return of each project is calculated as:
For Project W:
Lower Expected return
For Project X:
Lower Expected return
For Project Y:
Higher Expected return
For Project Z:
Higher Expected return
There is no question in (b)
Answer:
Option C. The required return will fall for all stocks, but it will fall more for stocks with higher betas.
Explanation:
If the Market Risk Premium is expected to fall, it means investor require less return for the same investment, it happens because when you make an investment you compare you return with the WACC (discount rate for investments) which includes the Market Risk Premium, if the rate is lower the investor will require less return.
The impact through Beta ratio will be higher if the company's beta is more than one, because this ratio amplify the impact of the Market Risk Premium either up or down.
Answer:
c. The beta of the portfolio is equal to the weighted average of the betas of the individual stocks.
Explanation:
The portfolio beta which is a measure of the systematic risk for a portfolio is calculated by taking the weighted average of betas of all the individual stocks that form up the portfolio. So the statement stating that the portfolio beta is equal to weighted average of individual stock betas is correct.