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Masteriza [31]
3 years ago
6

Suppose a mutual fund yielded a return of 14% last year. The risk-free rate was 5% last year and the stock market return was 10%

last year. Its CAPM alpha (α) is 0. What is beta (β) for the mutual fund in the CAPM?
Business
1 answer:
Makovka662 [10]3 years ago
4 0

Answer:

Beta is 1.8

Explanation:

CAPM or capital asset pricing model is used to compute expected return on stock by establishing relationship between expected returns and systematic risk (also called beta).

Given:

Return on mutual fund = 14%

Risk free rate (Rf) = 5%

Market return (Rm) = 10%

Risk premium = Rm - Rf

                      = 10% - 5%

                      = 5%

CAPM formula:

Returns = Rf + β(Rp)

14% = 5% + β(5%)

β = 9 / 5

β = 1.8

Beta of mutual fund is 1.8

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Park, Inc. acquired 100% of Gravel Co.'s net assets. On the acquisition date, Gravel's accounting records reflected $50,000 of c
Akimi4 [234]

Answer:

The  $400,000 should be a result of the acquisition of the in-process research and development activities

Explanation:

Intangible Assets: The intangible assets are those assets that cannot be seen or even touched. It is not tangible in nature

The example is goodwill, and intellectual properties like - patents, copyrights, trademarks, etc.  

The recording of the intangible assets based on the fair market value i.e $400,000 instead of associated costs.

5 0
3 years ago
On the first day of the fiscal year, Shiller Company borrowed $63,000 by giving a five-year, 12% installment note to Soros Bank.
lidiya [134]

Answer:

Bank A/c  Dr           $63,000

  To Notes Payable                         $63,000

(Being the issuance of the installment note for cash is recorded)

Explanation:

The journal entry is shown below:

Bank A/c  Dr           $63,000

  To Notes Payable                         $63,000

(Being the issuance of the installment note for cash is recorded)

For recording this transaction, we debited the bank account as it increased the assets account and at the same time it decreased the liabilities so the notes payable is credited

8 0
2 years ago
For each scenario, decide whether it creates a producer or a consumer surplus. Then, calculate the ensuing surplus.
Gnom [1K]

Answer:

Alice's consumer surplus =  $5

Jeff's consumer surplus = $16

Nicole's producer surplus = $1

Explanation:

Consumer surplus is the difference between the willingness to pay of a consumer and the price of a good.

Consumer surplus = willingness to pay - price of the good

Producer surplus is the difference between the price of a good and the least price the producer is willing to accept

Producer surplus = price of the good - least price the producer is willing to accept

Alice's consumer surplus = $30 - ($35 - $10) = $5

Jeff's consumer surplus = $20 - [$16 - (0.75 x $16)] = $16

Nicole's producer surplus = $501 - $500 = $1

5 0
3 years ago
Which of the following statements is FALSE?A. The income statement is put together at a specific point in time​ (end of a busine
skelet666 [1.2K]

Answer:

C. Depreciation is a current expense of a cash outflow in the current period.

FALSE depreciation is a deferral expense it do not related t oa cash flow

Explanation:

A. The income statement is put together at a specific point in time​ (end of a business​ quarter, or business​ year) and so the sale could be in one period and the cash received in another period.

CORRECT income statement end at a certain date and include transaction under accrual accounting which doesn't relate to cash disbursements or collection

B. The income statement contains the set of expenses associated with the products or services sold during the current operating​ period, with those expenses not associated with current cash flow labeled as nonminuscash expense items

CORRECT It works with accrual accounting

D. Companies depreciate fixed assets​ (such as office​ furniture, equipment,​ machinery, and​ buildings) over an assigned time​ period, but the initial cash outlay for the fixed asset typically occurs at the time the asset is acquired by the firm.

CORRECT the cash disbursements occurs at time zero. Then, the accounting distributes this over several period to decrease the impact in the first period

5 0
3 years ago
The unintentional misstatement or nondisclosure of a material fact made by one party with the hope of influencing the other part
wolverine [178]

The correct answer of the question is Fraud.

The unintentional misstatement or nondisclosure of a material fact made by one party with the hope of influencing the other party amounts to: Fraud.

<h3>What is Fraud?</h3>
  • It is a form of deception or an unlawful gain.
  • It is an intentional form of deception that can have various criminal consequences.
  • There are various kinds of frauds like bank fraud, insurance fraud etc..
  • It is committed with the intention of gaining an unauthorized benefit.
  • it can occur in various domains like finance, real estate, insurance etc.
  • Usually a fraud can lead the person to have legal consequences and the victim can sue the person or organization which was involved with the crime.

To learn more about fraud visit: brainly.com/question/20357860

#SPJ4

5 0
1 year ago
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