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
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

You might be interested in
"a pedestrian initiated a tort action in state a federal court against a driver for personal injuries he sustained from a collis
zaharov [31]

No, because Rule 8 applies, it is valid and constitutional, and it permits leaders to plead whatever relief they seek without the court's permission.

Definition of constitutional relating to, inherent in, or affecting the charter of body or mind. 2: of, referring to, or getting into the essential makeup of something: crucial. 3: being according with or legal by using the constitution of a country or society as a constitutional government.

because the constitution came under pressure in 1789, it's been amended in 27 instances, which includes one change that repealed a preceding one,[5] so that it will meet the needs of a kingdom that has profoundly changed because of the 18th century.[6] In preferred, the primary ten amendments, known collectively because of the invoice of Rights, provide specific protections of character liberty and justice and area restrictions at the powers of the presidency.

Learn more about constitutional here: brainly.com/question/21235714

#SPJ4

6 0
1 year ago
Which of the following is a low-interest loan to students with very high financial need? A.Direct PLUS B.Pell C.Gates D.Perkins
8090 [49]
My answer would have to be D.Perkins
7 0
3 years ago
Read 2 more answers
Problem 11-11 Calculating Operating Leverage [LO4] At an output level of 62,000 units, you calculate that the degree of operatin
Mandarinka [93]

Answer:

Percentage change in sales = [(Ending value - Beginning value) / Beginning value] * 100

Percentage change in sales = [($67,000 - $62,000) / $62,000] * 100

Percentage change in sales = 0.080645

Percentage change in sales = 8.0645%

Percentage change in OCF = Percentage change in sales * Degree of operating leverage

Percentage change in OCF = 8.0645% * 3.7

Percentage change in OCF = 29.84%

Will the new level of operating leverage be higher or lower?

As the sales increase, contribution margin will remain constant but operating margin percentage will rise. Therefore, this leads to fall in operating leverage.

3 0
3 years ago
A manufacturing firm is considering two locations for a plant to produce a new product. The two locations have fixed and variabl
o-na [289]

Answer:

Cost Advantage of different locations:

b. $20,000

Phoenix certainly had a cost advantage over Atlanta and based on this factor, it should be chosen for the new plant instead of any other city.

Explanation:

a) Total Costs of different locations:

                        Atlanta       Phoenix

Fixed Cost      $80,000     $140,000

Variable cost  400,000      320,000

Total Costs  $480,000    $460,000

b) Variable costs

                                   Atlanta       Phoenix

Annual Demand        20,000        20,000

Variable cost/unit        $20              $16

Total variable cost  $400,000  $320,000

c) Cost Advantage is the competitive edge which location (or company) can have over another through reduced production or marketing costs or both so that it can offer cheaper prices or use excess profits to bolster promotion or distribution.   In this case, the comparison is on the total cost, which is made of variable and fixed costs.

4 0
3 years ago
Which of the following countries experienced a decline in total output from 2000 to 2005?
sattari [20]

Answer: The correct answer is "B. Zimbabwe".

Explanation: GDP growth is crucial for an economy, since an increase in it reflects an increase in economic activity. If economic activity picks up, it means that unemployment tends to decrease and that per capita income increases.

In the case of Zimbabwe, population growth is far superior to GDP growth, therefore this makes economic growth much more difficult since there are more people per capita income is diminished.

7 0
3 years ago
Other questions:
  • Darren has the option of investing in either Stock A or Stock B. There is a 45 percent chance that the return on Stock A will be
    8·1 answer
  • Your small remodeling business has two work vehicles. One is a small passenger car used for job site visits and for other genera
    15·1 answer
  • If a production possibilities frontier appears as a downward sloping straight line, which of the following occurs?
    8·1 answer
  • A company named eyedetect has developed an eye tracking tool that could help detect what behavior
    6·1 answer
  • Zoey is just learning to read. it takes a lot of work for her to read even one sentence because she needs to sound out every wor
    5·1 answer
  • In business buying price is very important because of
    8·2 answers
  • 1. Characteristics of oligopoly An oligopolistic market structure is distinguished by several characteristics, one of which is m
    14·1 answer
  • How much of a person's income should go to charities?
    13·1 answer
  • Being able to ________ is a key benefit for those who study management. Multiple Choice relate to their managers and deal with o
    8·1 answer
  • Suppose that your local police department recovers 100 tickets to a big NASCAR race in a drug raid. It decides to distribute the
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!