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Len [333]
3 years ago
15

The T-bill rate is 4% and the market risk premium is 6%. Using CAPM, find the expected rate of return for a stock whose beta is

1.2. Express your answer to one decimal place and do not include percent sign (e.g., if your answer is 33%, type "33" only).
Business
1 answer:
nasty-shy [4]3 years ago
7 0

Answer:

11.2%

Explanation:

In this question, we apply the Capital Asset Pricing Model (CAPM) formula which is shown below

Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)

= 4% + 1.2 × 6%

= 4% + 7.2%

= 11.2%

The Market rate of return - Risk-free rate of return) is also known as the market risk premium and the same is applied.

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Assume you are in the business of producing and selling milkshakes. If you could produce more milkshakes with the same input, wh
poizon [28]

Answer:

Both increases

Explanation:

Suppose a person initially produces and sell some amount of milkshakes with the available resources.

But, if he will be able to produce and sell more quantity of milkshakes with the same level of resources then this will indicates that there is a rise in the productivity of this person and if the number of milkshakes sold increases then as a result profits increases at a same price level.

For Example:

Case 1:

Initially,

Person producing and selling = 20 units of milkshakes at a selling price of $10 each and cost of inputs used in the production = $50

Therefore, Profits = Total revenue - Total cost

                              = (20 units × $10 each) - $50

                              = $200 - $50

                              = $150

Case 2:

Now, we assumed that there is an increase in the productivity of this person. Cost of production and selling price of each milkshake remains the same.

Person producing and selling = 40 units of milkshakes at a selling price of $10 each and cost of inputs used in the production = $50

Therefore, Profits = Total revenue - Total cost

                              = (40 units × $10 each) - $50

                              = $400 - $50

                              = $350

Hence, there is an increase in the profits from $150 to $350.

6 0
3 years ago
The _____ approach to systems development is a group-based tool for collecting user requirements.
miss Akunina [59]
C. prototyping, does it makes sense now.
8 0
4 years ago
When organizing an Agile Release Train to optimize the flow of work and increase the delivery of value, which three DevOps pract
d1i1m1o1n [39]

The three devops that are encouraged in the agile release train are:

  • Visualize work in process and reduce batch sizes
  • Perform System Demos
  • Plan and rehearse failure response practices

<h3>What is the agile release train?</h3>

This is used to refer to the agile teams that are known to continuously

  • develop
  • deliver
  • operate.

They are known to operate one or more solutions of value in order to solve important problems.

Read more on an agile team here:

brainly.com/question/14257975

#SPJ1

7 0
2 years ago
Monetary policy refers to government actions that pursue what goal
Travka [436]

Explanation:

help me to find Xian pleaseee:( i miss him so much:(

sorry for answering Non sense po i hope u understand me ty po!

7 0
2 years ago
Everything else held constant, a balanced budget increase in government spending (that is, an increase in government spending th
Setler [38]

Answer: Option (A) is correct.

Explanation:

Other things remains constant, a increase in the balanced budget means that the amount by which government spending increases is offset by the identical increase in net taxes.

Increase in government spending will lead to increase the aggregate demand in the economy whereas increase in the net taxes will lead to fall in aggregate demand.

Here both increases by the same amount, but still there is an increase in the aggregate demand but the amount by which aggregate demand increases is less than the amount by which government spending increases.

This is because of the impact of tax and government spending multiplier. Tax multiplier is smaller than the government spending multiplier. All of the increase in government spending will going towards increase the aggregate demand but in taxes a portion of consumption decreased with decrease in the disposable income.

8 0
3 years ago
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