Answer:
14%
Explanation:
Capital asset pricing model measure the cost of equity oof a company. it is used to make decision for addition of specific investment in a well diversified portfolio.
Formula for CAPM
Expected return = Risk free rate + beta ( market risk premium )
As per given data
Beta = 1.06
Market risk Premium = 8.5%
Risk free rate = 5%
Cost of equity = 5% + 1.06 ( 8.5% )
Cost of equity = 5% + 9.01%
Cost of equity = 14.01%
Answer:
$59,200
Explanation:
Purchased price of Equipment = $300,000
Freight charges = $14,000
Cost of foundation = $40,000
Salvage value = $60,000
Useful life = 5 years
Total asset cost = $300,000 + $14,000 + $40,000
= $354,000
Annual depreciation = ($354,000 - $60,000)/5
= $296,000/5
= $59,200
Depreciation expense each year using the straight-line method will be $59,200
Answer:
d. $1,000
Explanation:
Gross domestic product is the sum of all final goods and services produced in an economy within a given period which is usually a year.
GDP = Consumption spending by households on durable and non durable goods and services + Investment spending by businesses + Government Spending + Net Export
Consumption spending = $200 + $200 + $100 = $500
Investment spending = $200 + $(500 - 400) = $300
Government spending = $200 + $100 = $300
Transfer payments aren't included in the calculation of GDP. So, the $200 spent on welfare and unemployment benefits and $300 on social security payments isn't included in the calculation of GDP.
Net export = Export- Import = $400 - $500 = $-100
GDP = $500 + $300 + $300 - $100 = $1000
I hope my answer helps you
Answer:
"repo" rate, paid by the seller of the securities to the buyer
Explanation:
For a given situation whereby repurchase agreement occurs between 2 government dealers, what is involved is that government securities dealer transacts securities with another dealer, based on consensus to buy them back at a future period.
The selling dealer receives money, and in return, pledges to pay interest to the buying dealer. The interest rate charged is referred to as the "repo" rate which simply means the repurchase agreement interest rate.
Hence, the correct answer in this case, is "repo" rate, paid by the seller of the securities to the buyer
Answer:
Increasing inflation expectations will change the demand curve to the left and the supply curve to the right, resulting in a fall in the price of the equilibrium. therefore new equilibrium occurs at a reduced price
Since Nominal rate of interest = Real interest rate + Inflation rate.
As a result, the rise in expected inflation will boost the nominal rate of interest on both quick-term and lengthy-term bonds.
The longer the bond maturity, the greater the volatility in price. The longer the maturity of the bond, the larger / bigger the price change as a result of market interest rate changes. As a result, long-term capital losses will be more than short-term capital losses.