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Taya2010 [7]
3 years ago
10

Which one of the following should earn the most risk premium based on CAPM?

Business
1 answer:
Nina [5.8K]3 years ago
5 0

Answer:

The portfolio with a beta of 1.38 should earn the most risk premium based on CAPM.

The correct answer is B

Explanation:

A diversified portfolio with returns similar to the overall market will not earn the most risk premium because its beta is equal to 1.

A stock with a beta of 1.38 produces the most risk premium because any stock with the highest beta gives the highest risk-premium. This is the correct answer.

A stock with a beta of 0.74 does not provide the highest risk premium.

Us treasury bill does not provide any risk premium since it is the risk-free rate.

A portfolio with a beta of 1.01 does not produce the highest risk premium.

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Pani-rosa [81]

Answer:

stock-held savings institution

Explanation:

6 0
2 years ago
For each of the following transactions of JonesSpa Corporation, for the month of January, identify each as an investing activity
expeople1 [14]

Answer:

1. Paid cash to purchase inventory

OPERATING ACTIVITY, DECREASES CASH FLOW STATEMENT

2. Purchased land by issuing common stock  

NON CASH INVESTING AND FINANCING ACTIVITY, DOES NOT AFFECT CASH FLOW STATEMENT

3. Accounts receivable decreased in the year

OPERATING ACTIVITY, INCREASES CASH FLOW STATEMENT

4. Sold equipment for cash

INVESTING ACTIVITY, INCREASES CASH FLOW STATEMENT

5. Recorded depreciation expense

OPERATING ACTIVITY, INCREASES CASH FLOW STATEMENT

6. Income taxes payable increased in the year

OPERATING ACTIVITY, INCREASES CASH FLOW STATEMENT

7. Declared and paid a cash dividend

FINANCING ACTIVITY, DECREASES CASH FLOW STATEMENT

8. Accounts payable decreased in the year

OPERATING ACTIVITY, DECREASES CASH FLOW STATEMENT

9. Paid cash to settle notes payable

FINANCING ACTIVITY, DECREASES CASH FLOW STATEMENT

10. Prepaid expenses increased in the year

OPERATING ACTIVITY, DECREASES CASH FLOW STATEMENT

11. Sold inventory for cash

OPERATING ACTIVITY, INCREASES CASH FLOW STATEMENT

12. Paid cash to acquire treasury stock

FINANCING ACTIVITY, DECREASES CASH FLOW STATEMENT

13. Net income

OPERATING ACTIVITY, INCREASES CASH FLOW STATEMENT

14. Decrease in accrued liabilities

OPERATING ACTIVITY, DECREASES CASH FLOW STATEMENT

15. Increase in prepaid expenses

OPERATING ACTIVITY, DECREASES CASH FLOW STATEMENT

8 0
2 years ago
On May 1, Shilling Company sold merchandise in the amount of $5,800 to Anders, with credit terms of 2/10, n/30. The cost of the
Arada [10]

Answer:

The correct answer is:

Debit: Account receivable $5,800

Credit: Sales revenue $5,800

Debit: Cost of goods sold $4,000

Credit: Merchandise inventory $4,000

Explanation:

On 1st May

Upon sale of inventory on credit

Debit: Account receivable $5,800

Credit: Sales revenue $5,800

On 1st May

To record cost of goods sold of merchandise inventory:

Debit: Cost of goods sold $4,000

Credit: Merchandise inventory $4,000

5 0
3 years ago
Bedford had this info at the end of 2015, its first year of operations: No other permanent or temporary differences exist. The l
Alex73 [517]

Answer: $150,000

Explanation:

Seeing as the litigation expense will only be paid in 2018, it should be added back to income for 2015.

= 900,000 + 100,000

= $1,000,000

As the depreciation will reverse evenly over the next three years and with future income probable, it should be removed from income.;

= 1,000,000 - 300,000

= $700,000

Municipal Bonds have the advantage of being Tax-exempt so their interest income should be removed to calculate how much tax should be paid.

= 700,000 - 200,000

= $500,000

2015 Income Tax Payable = 500,000 * 30%

= $150,000

5 0
3 years ago
The owner of a property creates a deed, leaving the name of the grantee blank, and puts it in a drawer, where it is forgotten fo
bazaltina [42]

Answer:

Because recording a deed as the grantee will allow the listed to legally hold the deed, plus having the physical deed is moreso evident of being grantee, unless the owner of the property has proof of the visitor forging his grantee permit he has no way of disputing it.

Explanation:

7 0
3 years ago
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