Answer:
4.5%
Explanation:
Stock R (Beta) = 1.5
Stock S (Beta) = 0.75
Expected rate of return on an average stock (Rm)= 10%
Risk free rate (Rf) = 4%
Required Return (Re) = Rf +(Rm-Rf) B
Required Return = 0.04 + (0.10-0.04) B
Required Return = 0.04 + 0.06B
Stock R = 0.04 + (0.06 * 1.50)
Stock R = 0.04 + 0.09
Stock R = 0.13
Stock R = 13%
Stock S = 0.04 + (0.06 * 0.75)
Stock S = 0.04 + 0.045
Stock S = 0.085
Stock S = 8.5%
Here, the more risky stock is R and less risky stock is S. Since, R has more beta than the Stock S.
= 13% - 8.5%
= 4.5%
Is this supposed to be a multiple choice question? It is way fun to think about projects other people might be up to which carry outrageously high risk!
Restaurants are a common example -- there's a little bit of magic in whether a new restaurant will catch on and become popular.
Farming is pretty risky. You can do everything right and have a hail storm come and ruin the crops. That's why there are government programs and commodity markets that help farmers mitigate their risk -- because the rest of us who need to eat really need for people to be willing to farm!
Answer:
With Yani's counter-wage offer, the insurance firm will likely reject his counter-offer and, in the extreme, withdraw the employment proposal with the firm.
Explanation:
As indicated in the question, the insurance company is a monopsony. A monopsony is the single buyer in the marketplace. This means that there is no other firm that can employ Yani in his Connecticut hometown. He must look for another job in another environment outside his hometown or condescend to accept the lower than hoped-for salary by the large insurance firm.
Answer:
d. operations management.
Explanation:
Operation management is multidisciplinary in nature , whose main purpose is to manage the company's resources such that they produce the highest degree of efficiency for the company. It involves controlling the processes of production, allocating resources in order to produce the final good or services. In this case the given description is of operations management.
