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Anni [7]
3 years ago
9

The risk-free rate is 6% and the expected rate of return on the market portfolio is 13%. a. Calculate the required rate of retur

n on a security with a beta of 1.25. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) b. If the security is expected to return 16%, is it overpriced or underpriced
Business
1 answer:
svet-max [94.6K]3 years ago
5 0

Answer:

a) The required rate of return is 14.75%

b) The expected return on this stock is 16% which is more than its required rate of return 14.75%, thus it is underpriced.

Explanation:

a)

Using the SML equation, we can calculate the required rate of return (r) of a stock.

r = rFR + β * (rM - rFR)

r = 6% + 1.25 * (13% - 6%)

r = 0.1475 or 14.75%

b)

The SML shows the return that is required on a security based on the risk is carries. Using SML we calculate the required rate of return which is the percentage return that investors require a security to provide.

If the expected return is greater than the required rate of return which means that security is expected to provide more than is required then the security is underpriced.

The expected return on this stock is 16% which is more than its required rate of return 14.75%, thus it is underpriced.

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HR can foster a triple bottom approach through incentive plans that focus on achieving comprehensive results rather than solely
navik [9.2K]

Answer:

a. True

Explanation:

Human resources management (HRM) can be defined as an art of managing, controlling and improving the number of people (employees or workers), functions, activities which are being used effectively and efficiently by an organization.

Thus, human resources managers are saddled with the responsibility of recruiting, managing and improving the welfare and working conditions of the employees working in an organization.

A triple bottom line (TBL) is a business management framework or model that comprises three (3) main components, which are; financial, environmental and social.

Human resources (HR) can enhance a triple bottom approach within an organization by establishing incentive plans that is typically focused on achieving comprehensive results rather than solely on profit incentives. Thus, it would foster the growth and development of an organization with respect to finance, environmental and social factors.

6 0
3 years ago
Which of the following is not one of the different classes of stocks A. Growth stock B. Preferred Stock C. Common stock CSR
bezimeni [28]

Answer:

A. Growth Stock

Explanation:

Stocks are divided into classes based upon their features with respect to the rights they carry. Usually stocks are of two classes:

  1. Common Stock
  2. Preferred Stock

While the former carry voting rights and avail dividends as per the profitability of the company, the latter carry preferential rights with respect to principal repayment in the event of winding up apart from carrying a fixed rate of dividend which must be paid periodically.

Growth Stocks refer to those stocks which yield higher rate of growth than average market rate but don't usually carry a right to dividend. Growth stocks relate to capital appreciation.

7 0
3 years ago
Urgent help needed. Thanks in advance.
VashaNatasha [74]

Answer:

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4 0
3 years ago
My neighbor’s lawn is overgrown. While I was mowing my own lawn, I cut hers, too. She offered to pay me but I would not take her
mario62 [17]
A suitible answer would be voluntary <span />
6 0
3 years ago
Read 2 more answers
Is there a pricing policy that would have filled the ballpark for the Phillies​ game?
zhannawk [14.2K]

Answer:

The correct answer is letter "B": Since the quantity supplied exceeds the quantity​ demanded, the Philadelphia Phillies could lower ticket prices to increase attendance.

Explanation:

According to the context, all the attention was on the Los Angeles Dodgers and the San Francisco Giants game since both teams had chances to win the championship. It will imply the rest of the day matches were not going to have a lot of attendance. The ballpark for the Phillies game could have been filled in the case ticket prices were lowered for basic <em>demand theory</em> (if prices decrease, quantity demanded will increase).

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3 years ago
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