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poizon [28]
3 years ago
7

Which of the following is true of risk and expected returns? If two investments have the same expected return, investors prefer

the riskier alternative. The expected return on an investment is independent of the associated risk. Higher the risk, higher the expected returns on an investment. The expected return on an investment is inversely proportional to the associated risk.
Business
1 answer:
Minchanka [31]3 years ago
7 0

Answer:

Higher the risk, higher the expected returns on an investment.

Explanation:

Generally speaking when investments are made the higher the risk, the higher the returns, and also the lower the risk the lower the returns.

For example shares are a low risk investment and they have low returns mostly in cents to the dollar.

However an investment like trading speculatively in the forex market has high returns where you can double or triple investment. Investors are also likely to lose all invested capital.

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The corporate charter of Martin Corporation allows the issuance of a maximum of 4,000, 000 shares of $1 par value common stock.
raketka [301]

Answer:

(a) 4,000,000

(b) 3,200,000

(c) 3,170,000

(d) $3,200,000

(e) $750,000

Explanation:

(a) Number of shares authorized = 4,000,000

(b) Number of shares issued = 3,200,000

(c) Number of shares outstanding:

= Number of shares issued - Acquired shares as treasury stock

= 3,200,000 - 30,000

= 3,170,000

(d) Balance of the Common Stock account:

= Number of shares issued × Par value

= 3,200,000 × $1

= $3,200,000

(e) Balance of the Treasury Stock account:

= Acquired shares as treasury stock × Price per share

= 30,000 × $25

= $750,000

4 0
3 years ago
Suppose you observe the following situation: Security Beta Expected Return Pete Corp. 1.45 .155 Repete Co. 1.14 .128 Assume thes
balu736 [363]

Answer:

Expected return on the market = 11.58%

Explanation:

MRP = Market risk premium

RFR = Risk free rate

ERM = Expected return on market

MRP = \frac{0.155-0.128}{1.45-1.14}=\frac{0.027}{0.31}= 0.0871

MRP = 8.71%

RFR = 0.155 - (1.45*0.0871) = 0.155 - 0.126295 = 0.0287

RFR = 2.87%

ERM = MRP + RFR = 8.71% + 2.87%

ERM = 11.58%

Hope this helps!

3 0
3 years ago
You own a portfolio that has $2,600 invested in Stock A and $3,600 invested in Stock B. If the expected returns on these stocks
Sav [38]

Answer:

the  expected return on the portfolio is $7,052

Explanation:

The computation of the expected return on the portfolio is shown below:

Stock A return = $2,600 + 12% of 2600 = $2,912

And,  

Stock B return = $3,600 + 15% of 3600 = $4,140

So,  

Expected return on portfolio is

= $2,912 + $4,140

= $7,052

hence, the  expected return on the portfolio is $7,052

7 0
3 years ago
15. If the Consumer Price Index (CPI) increases, the purchasing power of the dollar
Maurinko [17]
I think The answer is c
5 0
3 years ago
Which of the following accurately describes a situation in which consumers have inelastic demand?
Charra [1.4K]

Answer:

Demand for the coffee is inelastic

Explanation:

Inelastic demand is when individuals can't quit any pretence of utilising a good. People can't stop drinking coffee despite the fact that they need to cut  down on caffeine consumption. The demand for coffee is inelastic because change in the price or the after effects of coffee does not change the demand for coffee consumption.

6 0
3 years ago
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