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snow_tiger [21]
3 years ago
11

Pl lumber stock is expected to return 22 percent in a booming economy, 15 percent in a normal economy, and lose 2 percent in a r

ecession. the probabilities of an economic boom, normal state, or recession are 5 percent, 92 percent, and 3 percent, respectively. what is the expected rate of return on this stock?
Business
1 answer:
LekaFEV [45]3 years ago
3 0
                    Expected rate of return           Probabilities
Booming                22%                                    5%
Normal                  15%                                   92%
Recession               2%                                     3%

The expected rate of return on this stock is solved by multiply each expected rate of return to its corresponding probability and getting the sum of all products.

Booming: 0.22 x 0.05 =  0.011
Normal:   0.15 x  0.92 = 0.138
Recession 0.02 x 0.03 =<u> 0.0006</u>
Sum total                     0.1496  or 14.96% is the expected rate of return on this stock

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Your sister is thinking about starting a new business. The company would require $380,000 of assets, and it would be financed en
Andrews [41]

Answer:

$51,300

Explanation:

Given that,

Assets require = $380,000

Return on the invested capital, ROE = 13.5%

ROE = Net income ÷ Total Equity

0.135 = Net income ÷ $380,000

0.135 × $380,000 = Net income

$51,300 = Net income

Therefore, the net income must be expected to warrant starting the business is $51,300.

Note: Since, all of the total assets are financed by the common stock.

5 0
3 years ago
The discount rate is the interest rates on loans that the Federal Reserves makes banks. Banks occasionally borrow from the Feder
tigry1 [53]

Answer:

The higher discount rate lower the banks incentive to borrow from the Fed, lowering the quantity of reserves, and causing the money supply to fall.

This is because a higher discount rate makes borrowing from the Fed more expensive. Some of the money that would have been borrowed from the fed becomes bank reserves, and some other becomes loanable funds that increase the money supply. As a result, if banks borrow less from the fed, the money supply falls (or grow less).

The Fed Funds rate is the rate that banks charge one another for short-term overnight loans.

This occurs when banks are stripped of cash, and rely on other banks to meet their cash requirements for the day.

When the Fed buys government bonds, the reserves in the banking system increases, the banks demand for the reserves decreases, and the federal funds rate falls.

When the Fed buys government bonds, it is essentially creating money. This money enters the banking system in the form of reserves, of which some are loaned out, creating even money. Demand for the borrowed reserves falls because banks now need less of it, and as a result, their price: the federal funds rate, also falls.

Explanation:

8 0
3 years ago
Cassidy is planning to obtain a loan from her bank for $210,000 for a new home. the bank has approved cassidy’s loan at a fixed
Grace [21]

Cassidy's approximate monthly payment stands at $1420. if Cassidy lives planning to obtain a loan from her bank for $210,000 for a new home.

<h3>What is the payment monthly?</h3>

The monthly payment is the quantity paid per month to pay off the loan in the time period of the loan. When a loan is taken out it isn't only the top amount, or the original payment loaned out, that needs to be repaid, but also the good that accumulates.

<h3>What is a loan amortization schedule?</h3>

It is described as the systematic method of representing loan payments according to the time in which the principal amount and interest exist mentioned in a list manner

It is given that:

  • Cassidy lives planning to obtain a loan from her bank for $210,000 for a new home.
  • A fixed annual interest rate of 2.7% compounded monthly for 15 years.

The formula is:

P=F_{P} (i)/1-(1+i)^{-1}

Plug all the values in the above formula:

P=210000(2.7/12)/1-(1+(2.7/12)^{-15*12}

$1420.

Hence,

Cassidy's approximate monthly payment stands at $1420.

To learn more about monthly payment, refer

brainly.com/question/2151013

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4 0
1 year ago
Direct labor and indirect labor are recorded, respectively, to:A. Factory Overhead and Goods in Process.B. Goods in Process and
alexgriva [62]

Answer: The correct answer is "D. Goods in Process and Factory Overhead."

Explanation: Direct labor: it is the labor consumed in the areas that are directly related to production. It is generated by the workers or operators of the company. It is part of the cost that is incorporated directly into the product. Therefore it is registered as goods in process.

Indirect labor: it is the labor consumed in the administrative areas of the company or that production staff that does not participate directly in the production of the good. As it is part of the cost that is indirectly incorporated into the product, it is considered factory overheads.

4 0
3 years ago
Which of the following statements is NOT true regarding​ forecasting? A. Forecasting may involve taking historical data and proj
laiz [17]

Answer: Forecasting is exclusively an objective prediction.

Explanation: In simple words, the process of predicting any future event by analyzing the past data is called the forecasting. The factors that an analyst takes from the past could be both qualitative and quantitative.

     The forecasting process is done for a specified period and not for infinity. In other words, it is the study of trends and predicting how these trends could change in the future.

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

6 0
3 years ago
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