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Semenov [28]
3 years ago
14

Suppose that borrowing is restricted so that the zero-beta version of the CAPM holds. The expected return on the market portfoli

o is 17%, and on the zero-beta portfolio it is 8%. What is the expected return on a portfolio with a beta of .6?
Business
1 answer:
raketka [301]3 years ago
3 0

Answer:

10.4%

Explanation:

The computation of expected return on a portfolio is shown below:-

Expected return = Risk Free return + 5%Beta ( Market Return - Risk Free return)

= 5% + 0.60 × (17% - 8%)

= 5% + 5.4%

= 10.4%

Therefore for computing the expected return on a portfolio with a beta of .6 we simply applied the above formula.

The market return less risk free return is known as market risk premium

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An investor owned a 100-acre parcel that contained several natural asphalt lakes. A construction company was erecting highways f
Leona [35]

Answer: Yes

Explanation:

The construction company is entitled to compensation because it has a property right to enter and remove minerals.

The investor gave the construction company the right to use the properties on the land, if anything would be done on the land, the construction company should be compensated because they bought the right to do business there. Since the owner granted them the sole right, they are entitled to the resources.

7 0
3 years ago
Financial information for Forever 18 includes the following selected data (in millions): ($ in millions) 2018 2017 Net income $
e-lub [12.9K]

Answer:

$0.4433 and $0.425

Explanation:

The computation of the earning per share is shown below:

Earning per share is

= (Net income - preference dividend) ÷ (average shares outstanding)

For 2017, it is

= ($156 - $23) ÷ (300 shares)

= $0.4433

For 2018, it is

= ($188 - $18) ÷ (400 shares)

= $0.425

We simply applied the above formula so that the earning per share could be come for both the years

6 0
3 years ago
A sneaker manufacturing company targets teenagers. It sells the sneakers to these teenagers at a price which is lower than what
sladkih [1.3K]

Answer:

The correct answer is a. best-cost.

Explanation:

A best-cost strategy means palpable relief to the buyer, and is carried out under a series of characteristics that vary according to the product or service offered. In it, some functions that generate important values are sacrificed in order to offer a quality / service experience, which allows us to differentiate ourselves from the competition and thus be benchmarks in the sector. The statement shows a company that charges the design to the final buyer, which allows them to save costs in this area.

7 0
3 years ago
Millie Woods owns and operates a World of Food grocery store. Although her store is independently owned and operated, she has si
trasher [3.6K]

Answer:

wholesaler-sponsored chain.

Explanation:

Based on the information provided within the question it seems that Millie Woods' store is part of a wholesaler-sponsored chain. This refers to the voluntary union of a large quantity of independent stores or organizations into a single chain in order to be able to compete against large organizations. Which is what Millie accomplished by signing agreements with over seventy stores to work in unison.

5 0
3 years ago
Which of the following statements is (are) TRUE?
erik [133]

Answer:

All of the options are true.

Explanation:

I. As market prices increase, industry output rises because individual firms have upward-sloping marginal cost curves.

As the price of a product or service increases, suppliers will be willing to increase output because marginal costs should decrease as production increases (economies of scale).

II. As market prices increase, industry output rises because high-cost producers enter the industry.

As the price of a product or service increases, more suppliers will be willing to enter the market since the profit margins increase.

III. As market prices increase, industry output rises because individual firms have upward-sloping short-run supply curves.

As the price of a product or service increases, suppliers will be willing to increase production output because their profit margins should increase due to decreasing marginal costs, until they reach a limit where marginal costs start to increase and profit margins decrease.

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3 years ago
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