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kifflom [539]
3 years ago
14

You are evaluating a fund that had an annual average return of 7.2%. During that time, the average risk-free rate was 1.5% and t

he average market return was 8%. If the fund's beta is 0.8, what was its alpha? Answer in percent, rounded to one decimal place (e.g. 4.32% = 4.3).
Business
1 answer:
PilotLPTM [1.2K]3 years ago
7 0

Answer:

Risk free rate(Rf) = 1.5%

Market return(Rm) = 8%

Beta(β) = 0.8

ER(P) = Rf  + β(Rm – Rf)

ER(P) = 1.5 + 0.8(8-1.5)

ER(P) = 1.5 + 0.8(6.5)

ER(P) = 1.5 + 5.2

ER(P) = 6.7%

Alpha = Annual average return - ER(P)

         = 7.2% - 6.7%

         = 0.5%

Explanation:

In this case, we will calculate the expected return on the stock based on CAPM. Thereafter, we will calculate alpha by deducting the expected return from annual average return.

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a. Some entrepreneurs claim that creating a business plan is not necessary for launching a successful business venture. Do you a
ss7ja [257]

Answer:

In my opinion creating a business plan would make your chances of making a successful business higher since you already know what your doing, it can also help with your thought process and help you consider different aspects of your business. Not having a plan also would lead to all your ideas being in your brain which could make it harder to focus. But many entrepreneurs have started businesses without plans and have succeeded but I think its easier to have a plan.

5 0
2 years ago
At the beginning of the month, the Painting Department of Skye Manufacturing had 20,000 units in inventory, 70% complete as to m
Nadusha1986 [10]

Answer:

a. $2.00; $4.50

Explanation:

Equivalent unit of material = 120,000 units + (15,000 units*40%)

Equivalent unit of material = 120,000 units + 6,000 units

Equivalent unit of material = 126,000 units

Cost per equivalent unit of material = ($22,400 + $229,600) / 126,000 unit

Cost per equivalent unit of material = $252,000 / 126,000 unit

Cost per equivalent unit of material = $2 per unit

Equivalent unit of conversion cost = 120,000 units + (15,000*10%)

Equivalent unit of conversion cost = 120,000 units + 1,500 units

Equivalent unit of conversion cost = 121,500 units

Cost per equivalent unit of conversion = ($6,250 + $540,500) / 121,500 units

Cost per equivalent unit of conversion = $546,750 / 121,500 units

Cost per equivalent unit of conversion = 4.50 per unit.

4 0
3 years ago
The following information is available for Bandera Manufacturing Company for the month ending January 31:
elena-14-01-66 [18.8K]

Answer:

Answer: Cost of goods sold, gross profit and net income

Explanation:

Bandera Manufacturing Company

Cost of Goods Sold

Jan-31  

Finished Goods Inventory, January 1 73590

Add: Cost of Goods Manufactured 306090

Total Goods Available for Sales 379680

Less: Finished Goods Inventory, January 31 67080

Cost of Goods Sold 312600

b)  

Bandera Manufacturing Company

Gross Profit

Jan-31

Sales 651250

Less: Cost of Goods Sold 312600

Gross Profit 338650

c)  

Bandera Manufacturing Company

Net Income

Jan-31

Gross Profit  338650

Operating Expenses:  

Selling expenses 102250  

Administrative expenses 54050  

Less: Total Operating Expense  156300

Net Income  182350

2)  

a)  

Digital Vibe Manufacturing Company

Income Statement

For the Month Ended January 31

Sales  232300

Less: Cost of goods sold  103400

Gross profit  128900

Less: Operating expense  

Selling expense 59400  

Administrative expense 26100  

Total operating expense  85500

Net income  43400

b)  

Particulars Amount ($)

Materials purchased 48300

Less: Materials used for production 37200

Ending balance of materials 11100

Particulars Amount ($)

Materials used for production 37200

Add: Direct labor wages 55500

Add: Factory overhead 78200

Total cost of manufacturing 170900

Less: Transferred to finished goods 129900

Ending balance of work-in-process 41000

Particulars Amount ($)

Transfer from work-in-process 129900

Less: Cost of goods sold 103400

Ending balance of finished goods 26500

4 0
3 years ago
A(n) _____ is something a person wants to get out of a job or that brings them job satisfaction. a. personal value b. work value
vampirchik [111]

Answer:

It would most likely be be D. Interest

7 0
3 years ago
If the ending inventory in the previous period was understated $17,000 and the ending inventory in the current period was overst
kotegsom [21]

Answer:

In the current period,

b. Cost of goods sold

Explanation:

With the current period's beginning inventory (or previous period's ending inventory) understated by $17,000 and the overstatement of the current period's ending inventory by $27,000, it implies that the Cost of goods sold is understated by $10,000.  Once this cost is understated, the net income will be overstated, as well as the owner's equity (via the retained earnings).

4 0
2 years ago
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