Answer:
Expected return on stock =14.1
0%
Explanation:
The Capital Asset pricing Model (CAPM) can be used to determined the expected return on the stock.
<em>According to the Capital Asset pricing Model the expected return on stock is dependent on the level of reaction of the the stock to changes in the return on a market portfolio.
</em>
These changes are captured as systematic risk. The magnitude by which a stock is affected by systematic risk is measured by beta.
Under CAPM, Ke= Rf + β(Rm-Rf)
Rf-risk-free rate (treasury bill rate), β= Beta, Rm= Return on market, Ke-return on stock
Using this model, we can work out the return on stock as follows:
DATA
Ke-?
Rf- 4.5%
β-1.2
8
Rm- 12%
Ke = 4.5% + 1.28× (12-4.5)%=14.1
0%
Expected return on stock =14.1
0%
Answer:
Profit oriented
Explanation:
Price level is the approach which is referred to as the purchasing power of money. This is analyzed by the basket of goods approach, in which the consumer grounded goods and services are examined in total.
There are 4 usual approaches for finding the approximate price level for the service or product, and that are competition-oriented pricing., cost oriented, demand oriented and profit oriented.
Answer:
0%
Explanation:
Given that,
Growth rate of money supply = 3% per year
Real GDP growth rate = 3% per year
Velocity = Constant
According to the quantity growth theory of money,
M + V = P + Y
where,
M = Growth rate of money supply
V = Velocity
P = Inflation rate
Y = Real GDP growth rate
M + V = P + Y
3% + 0 = P + 3%
3% - 3% = P
0% = P
Therefore, the inflation rate is 0%.
