1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
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

You might be interested in
In the underground city of Neverwhere, GDP is $15 trillion, consumption is $10 trillion, and government spending is $2.5 trillio
9966 [12]

Answer:

$3 trillion

Explanation:

Given that,

GDP = $15 trillion

consumption = $10 trillion

Government spending = $2.5 trillion

Taxes = $1 trillion

Net capital inflow = $0.5 trillion

Investment:

= GDP - Consumption - Government spending + Net capital inflow

= $15 - $10 - $2.5 + $0.5

= $3 trillion

We know that savings is equal to investment spending.

Therefore, the total savings for the economy of Neverwhere is $3 trillion.

8 0
3 years ago
Excise tax is levied in the __ of goods and services
lina2011 [118]

Answer:

its probably buying

Explanation:

6 0
2 years ago
What is an incentive for a person to contribute to an IDA? It earns the highest interest rates available at a bank. It is good f
vagabundo [1.1K]
The correct answer for the question that is being presented above is this one: "An organization matches the amount deposited." An incentive for a person in order to contribute to an IDA is that an organization matches the amount deposited.
5 0
3 years ago
Read 2 more answers
Nathan is defending his first place ranking at the annual debate competition. Just minutes before his turn, Nathan gets nervous
satela [25.4K]

Answer:

The consideration which will be dictated for Nathan's self efficiency is:

C. Verbal persuasion

Explanation:

Here, in the question it is mentioned that Nathan has been defending his first place ranking in his annual debate competition.

Now, just some minutes before his turn in the annual debate competition he gets nervous and he cannot remember his arguments related to the debate topic.

His teacher comes and talk to him, teaches him, reminds him of his theories and topics. Also motivates him and make him remind his special skills and shore up his demoralised confidence.

By listening all these things he gets motivated and delivers his best and defends his title at his very best.

So, the consideration which will be dictated for Nathan's self efficiency is:

C. Verbal persuasion

7 0
3 years ago
The debt to owners' equity ratio is a common type of liquidity ratio
s344n2d4d5 [400]

Answer: No

Explanation: D/E is a solvency ratio. Liquidity ratios are quick and current ratios.

5 0
2 years ago
Other questions:
  • ________ and their members provide value because they buy and sell securities on behalf of the companies and individuals they re
    12·1 answer
  • Consider the following information regarding a person's decision to go to college college tuition is $20,000 per year, room and
    10·1 answer
  • Which of the following is a characteristic of an installment loan?
    11·1 answer
  • Its investment bankers have told Trickee Corporation that it can issue a 20-year, 8.3% annual payment bond at par. They also sta
    15·1 answer
  • In general, firms should use their weighted average cost of capital (WACC) to evaluate capital budgeting projects because most p
    13·1 answer
  • The following costs result from the production and sale of 4,900 drum sets manufactured by Tight Drums Company for the year ende
    8·1 answer
  • Zacher Co.'s stock has a beta of 1.48, the risk-free rate is 4.25%, and the market risk premium is 5.50%. What is the firm's req
    11·1 answer
  • Select the examples of Energy workplaces. mines, power plants, refineries, schools, trains, warehouses, stores, offices.
    9·2 answers
  • Discuss the reasons why founder and CEO Mikitani feels it is imperative for Rakuten to expand beyond the boundaries of Japan. Pr
    6·1 answer
  • armon apparels designs, manufactures, and distributes athletic apparel and accessories for men and women. the company has only n
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!