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Andru [333]
3 years ago
14

Which of the following statements about the capital asset pricing model (CAPM), which is the "father" of the security market lin

e (SML), is (are) most correct?a. The CAPM is based on a restrictive set of assumptions.b. It has not been empirically verified. In general, its inputs are difficult to estimate, particularly E(g).c. Despite its deficiencies, it provides investors with a rational way of thinking about required rates of return.d. All of the above responses are correct.
Business
1 answer:
HACTEHA [7]3 years ago
7 0

Answer:

(d) All of the above responses are correct

Explanation:

The Capital asset pricing model (CAPM) helps in calculation of expected rate of return by an investor which is dependent upon risk premium and beta.

Beta refers to sensitivity of return from stock with respect to the market return.

Risk premium refers to the additional rate of return which an investor must be provided so as to compensate him for additional risk he assumes.

ER = Rf + β (Rm- Rf)

ER= Expected Rate Of Return

Rf= Risk Free Rate of Return

Rm= Return from market

β = sensitivity index of security return to market return

Security Market Line (SML) is a graphic representation of CAPM.

Thus,  (d) is the correct option

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This is where labor and other factors of production are sold in the circular flow model of income in economic theory *it’s for e
erik [133]

Answer:

Resource Market

Explanation:

A resource market is a market from where businesses purchase inputs that can be used for production.

Resource Market is a market where labor and other factors of production are sold in the circular flow model of income in economic theory.

In Resource Market, households are the sellers and firms are the buyers.

8 0
2 years ago
Which accurately describes full-service brokers?
Margaret [11]

<u>Answer: </u>Option C provide advice to buying and selling stocks

<u>Explanation:</u>

A full service broker possesses a license to perform his job. He offers services such as advice, research and planning tips for the clients. Full service broker charges a commission which are generally high as they provide various services.

The service provided by full service broker is customized for the consumers based on their needs. If the client requires a stock broker or financial advisor they are assigned to  them each individually. The investment plan and wealth management can be done through full service broker.

8 0
3 years ago
Nipurna is a high school guidance counselor. Nipurna is well liked by the staff and students whom she supervises. She recognizes
Mnenie [13.5K]

Answer:

It would appear that she develops a participatory leadership or management.

Explanation:

"Theory Y managers have an optimistic, positive opinion of their people, and they use a decentralized, participative management style. This encourages a more collaborative, trust-based  relationship between managers and their team members.

People have greater responsibility, and managers encourage them to develop their skills and suggest improvements. Appraisals are regular but, unlike in Theory X [authoritative] organizations, they are used to encourage open communication rather than control staff."

Reference: Mind Tools Content Team. “Theory X and Theory Y: Understanding People's Motivations.” Team Management Training from MindTools.com, 2019.

3 0
3 years ago
On April 1, 2015, the City of Southern Ponds issued $3,500,000 in 4% general obligation, tax supported bonds at 101 for the purp
LUCKY_DIMON [66]

Answer:

B) $ 70,000.

Explanation:

Debt service expense

Debt service expense is the interest expense incurred to avail the debt services from another entity.

Debt service expense can be calculated using the following formula

Debt service expense = Face value of Bonds x Interest rate x Semiannual fraction

Where

Face value of bonds = $3,500,000

Interest rate  = 4%

Semiannual fraction = 6 / 12 = 1/ 2

placing values in the formula

Debt service expense = $3,500,000 x 4% x 1/2

Debt service expense = $70,000

3 0
2 years ago
Internal processes of a company contribute to the company's overall effectiveness. Identifying ways to improve internal processe
Contact [7]

Answer:

Explanation:

Internal processes of a company contribute to how effective the company runs. Looking for areas and ways to improve the internal processes will aid in building an organization that is highly efficient. The major causes needs to be known.

Ways of identifying the root causes might not be possible until basic analysis is carried out or sometimes it might be visible depending on the major problem facing the organization internally.

Internal process of a company increase the effectiveness of such company, identifying how to improve these internal processes helps to build an organization that is highly efficient.

6 0
3 years ago
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