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
Suppose that Bolivia has recently experienced an increase in its growth rate, although the total quantity of inputs in the count
Natalka [10]

Answer: Option B

Explanation: In simple words, economic growth refers to a situation when an economy produces more output in the current year as compared to the previous year.

The economic growth could happen from a number of factors. However in the given case, the growth in output is happening without any increase in input. This can only occur when the technology has been improved or the labor productivity has been increased.

Only under the above instances one can have more output than the previous level without increasing the input.

Hence from the above we can conclude that the correct option is B.

3 0
3 years ago
Daube Company's operations for the month of July are summarized as follows: Provided $8,600 of services on account. Received $3,
Norma-Jean [14]

Answer: See explanation

Explanation:

a. Determine the net income for July using the cash basis of accounting.

Revenue = $3800 + $1100 + $5100 = $10000

Less: Expense = $1200

Net Income = $10000 - $1200 = $8800

b. Determine the net income for July using the accrual basis of accounting.

Revenue = $8600 + $3800 = $12400

Less: Expense = $1300

Net income = $12400 - $1300 = $11100

8 0
3 years ago
Expenses, Losses, Income and Gains are associated with______accounts.
GarryVolchara [31]

Answer:

Expenses, Losses, Income and Gains are associated with nominal accounts.

5 0
2 years ago
Read 2 more answers
Management can estimate the amount of loss that will occur if the company does not prevail in a currently contested lawsuit. If
RideAnS [48]

Answer:

c. Not accrued Disclosed.

Explanation:

The management has estimated the loss contingency of lawsuit as reasonably possible. The Contingent liability is reasonably possible then it will be disclosed in the Notes to Financial Statements and not accrued in Balance sheet. If the contingent liability is probable then the accrual needs to be made in the Balance Sheet.

8 0
3 years ago
Innovative is a characteristic of which market structure
kotykmax [81]
Innovative is a characteristic of the OLIGOPOLY MARKET STRUCTURE. Oligopoly market structure is one that is characterized by a small number of large firms that dominate the market and which sell products that are either similar or different. There is a high barrier to entry into the market. Oligopolist industries are very innovative; they used their innovations to promote technological advancement and economic growth. 
8 0
3 years ago
Other questions:
  • Adam is an economist who believes that in the long run, all prices are flexible and that any increase in the money supply will l
    13·1 answer
  • Name two criminal justice careers that require a similar skillset and explain how this skillset aids in job performance.
    6·1 answer
  • Three aspects in the cover page of a business plan
    13·1 answer
  • It will take Cody 3 months to save up enough money to purchase a stereo. He has a credit card with a 12% interest rate. Cody’s f
    12·2 answers
  • York Casting Services started the year with total assets of $110,000 and total liabilities of $50,000. The revenues and the expe
    10·1 answer
  • Velco purchased a delivery truck at the beginning of Year 1 at a cost of $60,000. The truck is estimated to have a useful life t
    10·1 answer
  • Liam works at an IT firm. He finds that the activities carried out by his team are very complex and struggles to complete his ta
    14·1 answer
  • Visit the website for a different well known company
    14·1 answer
  • Aber Inc. plans to develop a shopping center. In the first quarter, they spent the following amounts: Acquisition of land $15000
    7·1 answer
  • On September 1, 2015, Select Company borrowed $600,000 from a bank and signed a 12%, six-month note payable, with interest on th
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!