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kari74 [83]
3 years ago
7

A stock has an expected return of 11.1 percent, its beta is .86, and the risk-free rate is 5.55 percent. What must the expected

return on the market be?
Business
1 answer:
mylen [45]3 years ago
5 0

Answer:

12%

Explanation:

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

As we know that

Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)

11.1% = 5.55% + 0.86 × (Market rate of return - 5.55%)

So, the market rate of return is

= (11.1% - 5.55%) ÷ 0.86 + 5.55%

= 12%

Also , The Market rate of return - Risk-free rate of return) is also known as the market risk premium

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For each item below, indicate whether a debit or credit applies.
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Answer and Explanation:

The indication of each transaction is as follows

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d. Unearned rent revenue contains credit balance so if there is an increase so it would be shown on the credit side

e. Interest payable contains credit balance so if there is decrease so it would be shown on the debit side

f.  Prepaid insurance contains debit balance so if there is an increase so it would be shown on the debit side

g. Expense contains debit balance so if there is an decrease so it would be shown on the credit side

h.  Supplies contains debit balance so if there is an decrease so it would be shown on the credit side

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8 0
3 years ago
When ivory started work at henderson textile co., she was amazed at its employees who would take thirty-minute restroom breaks,
vekshin1

Answer:

Organisational culture

Explanation:

Organisational culture is the unique personality of an organization or company. It is the culture of the company that influences how members of the company behave. The Assumptions, beliefs and values of the company dictates how the people working in the company behaves by influencing their actions, dressings and how they perform their jobs.

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6 0
3 years ago
Research that seeks to understand the nature or scope of a nation's criminal justice system is called:
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Research that seeks to understand the nature or scope of a nation's criminal justice system is called descriptive comparative  research.<span />
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3 years ago
An investor purchased 50 shares of stock in a company in 2015. At the time the investor purchased the stock, the value of the st
frutty [35]

Answer:

$75

Explanation:

$5 to $6.5 is a 1.3% increase and if the investor bought 50 shares of $5 he bought a total of $250 worth of stock. If you multiply the $250 by 1.3% it will be $325. But the question asks for the capital gain so you would subtract $325 and $250 which is $75.

3 0
2 years ago
Booker Petroleum Refiners (BPR) has an issue of 8-year, 11% annual coupon bonds outstanding. The bonds, which were originally is
Rzqust [24]

Answer:

$1,238.85

Explanation:

In this question, we use the present value formula which is shown in the spreadsheet.  

The NPER represents the time period.

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