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
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.

You might be interested in
Despite some optimism about the seeds of recovery, the Congressional Budget Office (CBO) sees joblessness rising. The CBO sees u
Xelga [282]

Answer:

The resulting rise in unemployment is mostly a rise in __cyclical____ unemployment because it is related to the state of the economy.

Explanation:

Frictional unemployment occurs as a result of workers' search for or transition to new jobs.  It is brief and does not leave a mark on the economy.  Structural unemployment comes about when the skills of workers do not match the requirements of employers.  Therefore, workers require retraining and reskilling.  Cyclical unemployment relates to the macro-economic situation that is prevailing during periods of recession.

5 0
3 years ago
If a donut shop sells a dozen donuts for $6.00, what would the cost of 9 donuts be at the same rate?
larisa86 [58]
To solve this question, first we need to find out the price of a single donut.

12 donuts = $ 6.00
1 donuts = $6.00 / 12

1 donuts = $ 0.50

After that, we just need to multiply the price for a single donut with the required amount (9), which will be:

9 x $ 0.50 = $ 4.50 . . . . for 9 donuts



3 0
4 years ago
The depreciation deduction for year 11 of an asset with a 20-year useful life is $4,000. If the salvage value of the asset was e
PtichkaEL [24]

Answer:

The answer is $80,000

Explanation:

The formula for straight-line depreciation is:

[Cost of asset - salvage value(if any)] ÷ useful life of the asset

Depreciation = $4,000

Cost of asset= ? (represented by y)

Useful life of the asset = 20 years

$4,000 = y ÷ 20 years

y is $4,000 x 20 years

y = $80,000

Therefore, the initial cost of the asset was $80,000

7 0
3 years ago
Prompt<br> What is the difference between liquid and illiquid assets?
Lynna [10]

Answer:

Liquid assets may be cash or property that can readily be converted to cash without a substantial loss in value. While on the other hand, Illiquid or fixed assets are possessions of value that are held long-term such as a home, land or equipment.

Hope this helps

4 0
3 years ago
Read 2 more answers
The most common source of business system failure is:
Inessa [10]
<span>

The most common source of business system failure is : B ) data quality

-Hope this helps.</span>
4 0
4 years ago
Other questions:
  • A firm expects to increase its annual dividend by 20 percent per year for the next two years and by 15 percent per year for the
    9·1 answer
  • You are considering two home security companies for your new house. The first company offers free installation and equipment, bu
    5·1 answer
  • Carl and Nancy Johnson prepared a household budget in an attempt to manage their money better. As part of their budgeting proces
    7·1 answer
  • Maryland Incorporated produces toys. Total manufacturing costs are $ 370 comma 000 when 90 comma 000 toys are produced. Of this​
    5·1 answer
  • Geneva Company manufactures dolls that are sold to various distributors. The company produces at full capacity for six months ea
    8·1 answer
  • In a perfectly competitive market, a firm's short-run supply curve is:_________.
    12·1 answer
  • Categories of expenditures Van and Amy Cho live in Swarthmore, PA. Amy's father, Carlos, lives in Sweden. For each of the follow
    13·1 answer
  • Of the "Five C's of Credit" which do you think is most important in determining someone's credit worthiness? Why?
    15·1 answer
  • During the year, Hamlet Inc. paid $22,000 to have bond certificates printed and engraved, paid $170,000 in legal fees, paid $9,0
    5·1 answer
  • Stefan is from Spain and is visiting Denmark. He finds himself very popular among native Danes because they like his casual and
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!