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Katyanochek1 [597]
3 years ago
12

Joe Jones, Inc. has a beta of .85. The risk-free rate is 5% and the expected rate of return on the market portfolio is 10%. a. C

ompute the required return for Joe Jones using the security market line (SML) equation.
Business
1 answer:
Gnesinka [82]3 years ago
4 0

Answer: 9.25%

Explanation:

Risk free rate, Rf = 5% = 0.05

We then subtract the risk free rate of 5% from the expected date of return on market portfolio of 10%. This will be:

= 10% - 5% = 5%

Beta = 0.85

Required return will now be:

= Rf + (Rm-Rf) x Beta

= 5% + (5% × 0.85)

= 5% + 4.25%

= 9.25%

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The demand curve for a monopolistically competitive firm is downward sloping because there is a full or advanced degree of the powerfulness in the market.

<h3>What is the shape of demand curve of the monopolistically competitive firm?</h3>

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Answer:

Results are below.

Explanation:

Giving the following information:

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