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
Pachacha [2.7K]
3 years ago
8

The expected return on the market portfolio is 13%. The risk-free rate is 6%. The expected return on SDA Corp. common stock is 1

2%. The beta of SDA Corp. common stock is 1.50. Within the context of the capital asset pricing model, _________.
A) SDA Stock is underpriced.
B) SDA stock is fairly priced.
C) SDA Corp. stock's alpha is –1.80%.
D) SDA stock's alpha is 1.8%.
Business
1 answer:
vagabundo [1.1K]3 years ago
8 0

Answer:

-4.50%

Explanation:

As we know that

Expected Rate of Return = Risk Free Rate of Return + Beta × Market Risk Premium

where,

Market Risk Premium is

= Expected Return on Market Portfolio - Risk Free Rate

= 13% - 6%

= 7%

So, the expected rate of return is

= 6% + 1.50 × 7%

= 16.50%

And the expected return on SDA Corp. common stock is 12%

So, the SDA Corp stock alpha is -4.50%

which come from

= 12% - 16.50%

This is the answer and the options that are mentioned are wrong.

You might be interested in
Sweet Stuff Sugar Source ships product all over the world. Since the product it ships has a low value-to-weight ratio, transport
dedylja [7]

Answer:

a large percentage of the total cost

Explanation:

When a product has a high value to weight ratio it means it is expensive and the weight is light. For products with low value to cash ratio they are cheap but have large weight.

Low value to weight ratio goods are more expensive to transport and they do not make up the high transportation cost because they are also cheap.

In this scenario Sweet Stuff Sugar Source ships low value to weight goods all over the world. So their transportation cost will be high and it will make up a large percentage of total cost.

5 0
3 years ago
while the washington family was gone for the weekend, their home was broken into and robbed. manny, a professional boxer who liv
Kisachek [45]

Manny's acts would be a past factor in any lawsuit he filed against Mr. Washington, so Manny would lose. Filipino boxer Manny Pacquiao competed as a professional from 1995 until 2021. regarded as one of the greatest professional boxers ever by boxing historians...

<h3>Where does Manny stand historically?</h3>
  • On ESPN's list of the top boxers, pound-for-pound, over the past 25 years, Pacquiao was placed second in 2016. Pacquiao is ranked by BoxRec as the third-best boxer of all time, pound for pound, and as the best Asian boxer ever.
  • A boxer who has won major world championships in eight different weight divisions is known as an octuple champion. The only boxer in history, Manny Pacquiao, has won twelve major world championships in just eight years.

To learn more about Manny pacquiao refer to:

brainly.com/question/28774013

#SPJ4

3 0
1 year ago
Wats a different way to say "measure the area and cut flooring material to fit"
agasfer [191]

i think squaring away

8 0
3 years ago
Which of the following is a tangible incentive for good team performance?
shepuryov [24]

Answer:

Option A an early lunch is your answer ☺️☺️

5 0
3 years ago
Of these common educational requirements for Finance careers, select those you are most interested in achieving. Check all that
Nataly [62]

Answer:

The correct options are Advanced degree after a traditional four year college degree and On the Job training Experience.

Explanation:

If I like to persuade my career in the Finance Field, I would definitely go for the Four Year degree program in finance and then do Advance education in the concerned field. Then i would like to get the on the job training experience in the finance department of a renowned company to have a true learning experience of the finance field in real time. This would prepare me to become fully knowledgeable about the finance matters before entering into the market as a finance professional. So getting advance degree after basic degree in finance and getting the on the job training would be my choices for Finance Careers.  

3 0
3 years ago
Read 2 more answers
Other questions:
  • After 8 years of working for a company that installed underground sprinkling systems for golf courses, Trevor was ready to ventu
    9·1 answer
  • Payback occurs when: a. the net cumulative benefits equal the net cumulative costs. b. the net costs are lower than the cumulati
    11·1 answer
  • Those who study management will understand how to ___.
    8·2 answers
  • The purpose of posting is to A. list the transactions in chronological order in the journal. B. provide an explanation of the tr
    5·2 answers
  • sold real property with a $140,000 adjusted basis for $255,000. The buyer paid $148,000 cash and assumed Mr. Beck's $107,000 mor
    11·1 answer
  • Which of the following scenarios would likely shift the supply curve for potatoes to the right (increase in supply)?
    11·1 answer
  • On August​ 14, Park Avenue Bank lent​ $210,000 to City Coffee Shop on a 75​ day, 4% note. What is the maturity value of the​ not
    15·1 answer
  • Which of the following is true of a matrix organizational structure? A matrix organizational structure is hierarchical, but inst
    8·1 answer
  • Funds that are identified for specific work packages and cover risks that have a low probability of occurring are called _______
    9·1 answer
  • In an efficient capital market, only ______ or ________ information will make stock prices move.
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!