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babunello [35]
3 years ago
8

The expected return on JK stock is 16.28 percent while the expected return on the market is 11.97 percent. The stock's beta is 1

.63. What is the risk-free rate of return?
Business
1 answer:
alukav5142 [94]3 years ago
6 0

Answer:

Risk-free rate of return= 5.13%

Explanation:

<em>The capital asset pricing model is a risk-based model. Here, the return on equity is dependent on the level of reaction of the the equity to changes in the return on a market portfolio. These changes are captured as systematic risk. The magnitude by which a stock is affected by systematic risk is </em><em>measured by beta.</em>

Under CAPM, E(r)= Rf + β(Rm-Rf)

Rf-risk-free rate (treasury bill rate), β= Beta, Rm= Return on market., E(r)- Return on equity

This model can be used to work-out the risk-free rate as follows:

E(r) = Rf + β (Rm-Rf)

Rf- ?,  β= 1.63, Rm- 11.97,  E(r)- 16.28

16.28 = Rf + 1.63× (11.97 - Rf)

16.28 = Rf + 19.5111  - 1.63Rf

collect lie terms

1.63Rf - Rf = = 19.5111- 16.28

0.63Rf = 3.2311

Divide both sides by 0.63

Rf = 3.2311 /0.63

RF = 5.128

Rf= 5.13%

Risk-free rate of return= 5.13%

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Nutka1998 [239]

Answer: 18,000

Explanation:

Liability policy:

Insurance\ expense\ per\ month=\frac{Prepaid\ Insurance\ for\ liability\ policy}{Period\ of\ policy}

Insurance\ expense\ per\ month=\frac{36,000}{18}

                                                            = 2,000

Insurance expense 2018:

= No. of months from 1 Jan 2018 to 31 Dec 2018 × Insurance expense per month

= 12 × 2,000

= 24,000

Prepaid insurance balance for liability policy on 31 Dec, 2018:

= Prepaid Insurance for liability policy - Insurance expense 2018

= 36,000 - 24,000

= 12,000

Crop damage policy:

Insurance\ expense\ per\ month=\frac{Prepaid\ Insurance\ for\ crop\ damage\ policy}{Period\ of\ policy}

Insurance\ expense\ per\ month=\frac{12,000}{24}

                                                            = 500

Insurance expense 2018:

= No. of months from 1 Jan 2018 to 31 Dec 2018 × Insurance expense per month

= 12 × 500

= 6,000

Prepaid insurance balance for crop damage policy on 31 Dec, 2018:

= Prepaid Insurance for crop damage policy - Insurance expense 2018

= 12,000 - 6,000

= 6,000

Therefore,

Total prepaid insurance balance on 31 Dec 2018:

= Prepaid insurance balance for liability policy on 31 Dec, 2018 + Prepaid insurance balance for crop damage policy on 31 Dec, 2018

= 12,000 + 6,000

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7 0
3 years ago
As a new member of the Challenge for Charity Group, you notice that the association has its own way of operating. Last week, the
lyudmila [28]

THE COMPLETE PARTS OF THE QUESTION

(socializing, incorporating, recruiting, inducting) members into the culture of the organization through the use of _____ (org design, criteria for selecting club members, reward systems & norms, leader reactions to critical incidents)

Answer:

1) socializing

2). reward systems & norms

Explanation: SOCIALIZING is the act or process through which a person or group of persons interact with others and take part in the activities which others do.

REWARD SYSTEM is the term used to describe the various processes or steps involved in compensation or paying for the Activities of others.

NORMS are a set of customs and traditions which have been found to be generally accepted and adopted as way of life.

5 0
4 years ago
The Hopper Leg Winery from California's Sonoma Valley is trying to enter the wine market in France. To the company's surprise, i
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Answer:

exclusive

Explanation:

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Generally, a marketing mix is made up of the four (4) Ps;

1. Products: this is typically the goods and services that gives satisfaction to the customer's needs and wants. They are either tangible or intangible items.

2. Price: this represents the amount of money a customer buying goods and services are willing to pay for it.

3. Place: this represents the areas of distribution of these goods and services for easier access by the potential customers.

4. Promotions: for a good sales record or in order to increase the number of people buying a product and taking services, it is very important to have a good marketing communication such as advertising, sales promotion, direct marketing etc.

In this scenario, The Hopper Leg Winery from California's Sonoma Valley is trying to enter the wine market in France. To the company's surprise, it found that the France wine distribution channel was difficult to access as an outsider. Based on this, the market must have an exclusive distribution channel i.e the exclusive or unique rights to be a retailer for the supplier or manufacturer of the wine products.

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Answer:

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Explanation:

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Fredrick works for the firm, and the implication is that, he's an agent of the agency firm, and the advertising firm is the Principal. The action of Fredrick routinely accepting pay-offs from the billboards owners contravenes this arrangement. Fredrick is thus acting parallel in line with his Principal.

It is thus worthy of note that Fredrick could only rationalize this action because he believes he is servicing the needs of the advertising agency and also the billboards owners. In his wisdom, everyone's objective is being made, bar the moral implications and obligations.

So, among the options enlisted, option B is the plausible answer.

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5 0
4 years ago
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