Answer:
a) 15.33%
b) 16.4%
Explanation:
Data provided in the question:
Annual interest rate = 10 percent
Additional cost of maintaining a field warehouse = $16,000 per year.
Now,
Annual financing cost
= [ ( Interest cost + Additional cost ) ÷ Usable funds ] × 100%
For a) Amount borrowed = $300,000
Annual financing cost
= [ ( 10% of $300,000 + $16,000 ) ÷ $300,000 ] × 100%
= 15.33%
For b) Amount borrowed = $250,000
Annual financing cost
= [ ( 10% of $250,000 + $16,000 ) ÷ $250,000] × 100%
= 16.4%
Answer:
$40,500
Explanation:
The computation of the bill payment paid by the insurance is shown below"
= Medical bill incurred cost × percentage given + deductible amount
= $50,000 × 80% + $500
= $40,000 + $500
= $40,500
We simply added the medical bill insured cost based on the percentage and the deductible amount so that the accurate amount can come
Chronic bronchitis is an inflammatory condition that results in excessive production of mucus in the large or main bronchial air passages resulting in reduced airflow and shortness of breath.
Answer:
The expected return on a portfolio is 14.30%
Explanation:
CAPM : It is used to described the risk of various types of securities which is invested to get a better return. Mainly it is deals in financial assets.
For computing the expected rate of return of a portfolio , the following formula is used which is shown below:
Under the Capital Asset Pricing Model, The expected rate of return is equals to
= Risk free rate + Beta × (Market portfolio risk of return - risk free rate)
= 8% + 0.7 × (17% - 8%)
= 8% + 0.7 × 9%
= 8% + 6.3%
= 14.30%
The risk free rate is also known as zero beta portfolio so we use the value in risk free rate also.
Hence, the expected return on a portfolio is 14.30%
Answer:
(A) Successive price changes are independent of each other
Explanation:
Random walk theory claims that past information and trends cannot be used to predict future price movement of the stocks since as per the theory, stock price movements are unpredictable and walk(move) randomly.
The theory further suggests that stock prices have same distribution and are independent of one another. It means there is no correlation between price movements of two different stocks.
Thus, Stock prices follow a random walk implies that successive price changes are independent of each other.