Answer:
$6.64
Explanation:
The applicable formula
A = p x ( 1+ r)^ n
A =amount after 3 months
p=principal amount: $960
r = interest rate : 2.74% per year or 2.74/12 per month =0.23% or 0.0023
n = 3 month
A = $960 x ( 1+ 0.0023) ^3
A =$960 x (1.0023)^3
A =$960 x 1.00691
A=$966.64
compound interest Earned
=$966.64 - $960
=$6.64
Answer:
A. Stock A should have a higher expected return.
Explanation:
Capital Asset Pricing Model (CAPM) formula is used to calculate expected return of a stock and the formula is as follows;
CAPM; r = risk free rate + beta(Market risk premium)
Since beta is in the CAPM and determines the rate of return, we will use beta to compare these two stocks. The higher the beta, the higher the rate of return. Stock A has a beta of 0.9 which is higher than that of B (0.6). Therefore, stock A's stock return will be higher than that of B but lower than the market return since beta of the market is 1.0.
Answer:
Relatively more than
Explanation:
As we know,
The levered firm is that firm in which debt is involved whereas unlevered firm is that firm in which there is no debt involved.
As if the EBIT drops, the return on equity drop is relatively more than the ROE of unlevered firms due to involvement and not involvement of debt. As it generated high risk and return which is gradual increases during a given period of time
Explanation:
<u>advantages</u>
.Human beings need money to pay for all the things that make your life possible, such as shelter, food, healthcare bills, and a good education.
Money gives you the power to pursue your dreams.
Money gives you freedom.
Money gives you security.
<u>disadvantages</u>
•Money can lead to disagreements.
•obsession with money, or a love of money, can create a host of problems.
Answer: b. using a fixed basket of goods and, therefore, will tend to overstate inflation.
Explanation:
CPI uses a fixed basket of goods each year and measure inflation by monitoring the changes in this basket over several years/ periods.
This has the tendency to overstate inflation however, due to three(3) main reasons: Substitution bias, Quality bias and New product bias.
With substitution bias, the CPI does not take into account that when products increase in price, people will substitute them for lower priced goods. Quality bias means that CPI does not account for change in quality. New Product bias means that CPI does not account for new and better products as it uses a fixed basket.
Put together these three can cause CPI to overstate inflation by as much as 1% sometimes.
