All categories

3 years ago

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

Prior to the 1870s, both gold and silver were used as international means of payment and the exchange rates among currencies wer

SashulF [63]

Answer:

the exchange rate between U.S. dollar and German mark be under this system will be of 3 U$D = 1 german mark

Explanation:

We will use gold and silver as a mean to equalize both currencies:

First equivalence between silver and gold:

90 francs = 1 ounce of gold

9 franc = 1 ounce of silver

90/9 = 10 ounce of silver equals 1 ounce of gold.

Now, we convert the german mark to gold:

1 german mark = ounce of silver

10 german mark = ounce of gold.

Finally, we equalize with the US dollars:

30 dollar = ounce of gold = 10 german mark

30 dollars = 10 german mark

3 dollars = 1 german mark

4 0

3 years ago

What isn't not a stock derivative

nadezda [96]

A derivative is a contract between two or more parties whose value is based on an agreed-upon underlying financial asset, index, or security. ... Similarly, a stockoption is a derivative because its value is "derived" from that of the underlyingstock.

7 0

3 years ago

Conversations on twitter move fast and it's easy to miss the opportunity to engage with an important influencer or prospect. ___

Fiesta28 [93]

Conversations on twitter move fast and it's easy to miss the opportunity to engage with an important influencer or prospect. Twitter lists are a great way to group together similar people and topics in twitter so you can focus on activity within a group without distractions.

Twitter lists is a list you can create on twitter to organize your topics. This helps speeds up the time and allows you to read/view the information that you want without the distractions of other information clogging your feed. People can communicate so fast past on twitter that it is often hard to keep up, so by doing this, it makes everything more streamline.

7 0

2 years ago

Which of these is the interest rate that is actually observed in financial markets? real risk-free rate real interest rates nomi

Eduardwww [97]

Answer: Nominal interest rate.

Explanation:

Nominal interest rate is the interest rate before inflation is taken into account.

Nominal interest rate is also the advertised or interest rate stated on a loan, without adding any other fees or compounding the interest.

The nominal interest rate is quoted on bonds, loans etc. It is the advertised rate without taking into cognisance inflation, inflation, taxation and compounding interest.

8 0

2 years ago

Updating procedures and systems, reinforcing marketing strategies, and updating advertising techniques, are all examples of what

Travka [436]

An operational change is an exchange inside the structure of your corporation. That could be a reorganization, layoffs, or just a group alternate daily a strategic or task declaration trade. Operational changes are a number of the roughest in your personnel due to the fact they by no means quite understand daily.

Change is basically a variation within the common manner of doing things. every time people carry out a venture in a sure way, they get accustomed to them. They expand strategies which they could put into effect mechanically every day to reap those tasks. Any variation in those strategies is not anything however change.

An alternate is a venture, initiative, or solution being added to the agency to improve the manner work gets accomplished, clear up a problem, or take benefit of a possibility. Almost any project, initiative, or solution that improves a company will affect how employees do their work.

Learn more about the corporation here: brainly.com/question/24448358

#SPJ4

8 0

1 year ago