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
sergey [27]
3 years ago
9

If the market risk premium is 8%, then according to the capm, the risk premium of a stock with beta value of 1.7 must be:

Business
1 answer:
Zinaida [17]3 years ago
4 0

The Capital Asset Price Modeling (CAPM) gives the formula for calculating the expected return of an asset given the risk as:

Rs = Rf + β<span> (Rm – Rf)
Where,</span>

Rs = expected return of the financial asset

Rf = risk free rate of return

β = beta value of the asset

Rm = average return on the capital market

The factor (Rm – Rf) is also called as the market risk premium while the factor (Rs – Rf) is the stock risk premium.

Rs – Rf = β (Rm – Rf)

Rs – Rf = 1.7 (0.08)

Rs – Rf = 0.136 = 13.6%

Answer:<span> greater than 12%  (= 13.6%)</span>

You might be interested in
Eduardo has always wanted to operate his own fast food restaurant but he knows the high failure rate of restaurants. To increase
telo118 [61]

Answer:

buying a franchise of a well-established restaurant.

Explanation:

A franchise business model is a business arrangement where the owner or 'franchisor' sells the rights of a business to ' franchisee' who operates an independent outlet.  The rights that a franchisee acquires include business name, logo,  business and operating models.  Examples of known franchises are MacDonald,  subway, and Starbucks.

The biggest advantage Eduardo will gain by purchasing a franchise is that he will get instant access to a well-established brand name.  Eduardo does not need to spend resources on creating a name, or products to introduce to customers. An established franchise will provide him with customers,  a management model, and a chance to succeed.

4 0
3 years ago
It is easier for employees to develop positive customer/client relations if employees understand that each customer is
Sergio [31]
A unique individual is the answer (if this is right can you please mark as brainliest, thanks)


7 0
3 years ago
Some analysts try to predict how likely a policy issue will be placed on the agenda for action. Policy issues that have ___ ___
yKpoI14uk [10]

Answer:

Low conflict and high salience

Explanation:

Placing an issue on the list of public agenda does not occur overnight. The issue that is to be placed on public agenda needs to meet some certain criteria.

First among these criteria is that it must be an issue with a low amount of conflict. What this means is that if there are no oppositions to a certain issue and there is generally a reasonable amount of agreement between the parties involved, then we can confidently agree that the particular issue can be placed on public agenda.

Secondly, the issue to be placed on public agenda must have high salience. What do we mean by this? This means the particular issue must be prominent or important enough to be discussed. If the issue on ground is not prominent, than it cannot be presented on the list of agenda.

3 0
3 years ago
In 2016, the population of the United States was approximately 325 million people, with an annual growth rate of approximately 0
Tpy6a [65]

Answer:

The population would be 1318 million

Explanation:

Acording to the formula

<h2>Nt =Noe^{T * r}</h2>

Nt = population size in generation t

No =  initial population size.

e= number e

T= number o years

r = rate

<h2>Nt =325 x ( e^{200 * 0.007})</h2><h2></h2><h2>Nt =  1318 millions</h2>

4 0
4 years ago
Which word best completes the sentences depicte? Private Finanical institutions encourage saving and investing by paying ____ on
Zina [86]
A. Liability i think so
3 0
3 years ago
Other questions:
  • What is the difference between a vocational school and on the job training
    6·2 answers
  • The simple case of a fixed per-unit tax is indicative of more complicated ones. consider a proportional sales tax and a progress
    14·1 answer
  • thew recently purchased a new laptop for $1,500. He subsequently saw an advertisement for what appeared to be a similar model be
    8·1 answer
  • When a temporary negative supply shock hits the economy​ ________.
    5·1 answer
  • Jimmi wants a new cellular phone that many other people also want to buy. There are not enough phones produced to fill the deman
    8·1 answer
  • In the first half of 2011, automobile sales in the United States were lower than they were in the first half of 2010. The decrea
    9·1 answer
  • Which of the following statements is false?
    5·2 answers
  • Beech Soda, Inc. uses a perpetual inventory system. The company's beginning inventory of a particular product and its purchases
    6·2 answers
  • The accounting equation can be stated as
    6·1 answer
  • The main reason for considering nonconstant growth in dividends is to allow for _____ growth rates over _____.
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!