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erastova [34]
3 years ago
9

You recently purchased a stock that is expected to earn 22 percent in a booming economy, 11 percent in a normal economy, and los

e 4 percent in a recessionary economy. There is a 24 percent probability of a boom, a 67 percent chance of a normal economy, and a 9 percent chance of a recession. What is your expected rate of return on this stock?
a. 6.14 percent
b. 11.00 percent
c. 12.29 percent
d. 9.67 percent
e. 3.45 percent
Business
1 answer:
UkoKoshka [18]3 years ago
3 0

Answer:

Return on stock will be 12.65%

So option (c) will be the correct option

Explanation:

We have given expected return in booming economy = 22 %

Expected return in normal economy = 11 %

Expected return in recessionary economy = 4%

Probability of boom = 24% = 0.24

probability of normal economy = 67%=0.67

Probability of recession = 9 % =0.09

So  Expected return on stock = (Return in boom economy x Probability of boom economy) + (Return in normal economy x Probability of normal economy) +(Return in recessionary economy x Probability of recessionary economy)

Expected return on stock = (0.22 x 0.24) + (0.11 x 0.67) + (-0.04 x 0.09)

= 0.0528 + 0.0737 = 0.1265 = 12.6%

So option (c) will be the correct option

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Country Alpha has 15 thousand acres of land and 45 thousand laborers, whereas Country Beta has 100 thousand acres of land and 20
Monica [59]

Answer: b. good B; good A

Explanation:

According to the Heckscher-Ohlin model, a country should export the good that is has a relative abundance in and import the good it has relative scarcity in.

Find out labor to land ratio of both countries:

Country Alpha = 45 / 15 = 3

Country Beta = 200 / 100 = 2

Country Alpha has 3 labor units per acre

Country Beta has 2 labor units per acre

Country Alpha therefore has more labor abundance and should export the labor intensive good which is good A which means <u>Country B will import A</u>.

Country Beta should <u>export more land intensive good which is good B. </u>

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3 years ago
If Laura is aggressive and someone bumps into her, what is most likely her<br> response?
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5 0
3 years ago
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rusak2 [61]

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Explanation:

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8 0
3 years ago
Listed below are several transactions that took place during the first two years of operations for the law firm of Pete, Pete, a
umka2103 [35]

Answer:

<u>Cash Flow</u>

year 1: cash generated in operating activities:    35,000

year 2: cash used in operating activities (28,000)

<u>Receivables:</u>

year 1: 23,000

year 2: 40,000

<u>Net Income</u>

year 1: 32,000

year 2: 59,000

Explanation:

<u></u>

Cash flow:

<u>operating activities: year 1</u>

collected from client                    170,000

salaries paid to employees        (100,000)

utilities                                           (35,000)

insurance policy                           (63,000)

cash used in operating activities (28,000)

<u>operating activities: year 2</u>

collected from client                     200,000

salaries paid to employees           (110,000)

utilities                                             (55,000)

cash generated in operating activities:    35,000

receivable:

billed - collected

year 1 receivables 193,000 - 170,000 = 23,000

year 2 receivables 240,000 - 200,000 = 40,000

<u>Income Statement year 1</u>

fees revenues 193,000

salaries           (100,000)

utilities            (40,000) (incurred cost)

insurance        (21,000)  (63,000 for three years, the value of 1 year is 21,000)

net income          32,000

<u></u>

<u>Income Statement year 2</u>

fees revenues 240,000

salaries           (110,000)

utilities            (50,000) (incurred cost)

insurance        (21,000)  (63,000 for three years, the value of 1 year is 21,000)

net income      59,000

5 0
3 years ago
Topdog is a toy company, whose profit/sales percentage is 13% in 2015, 16% in 2016 and 20% in 2017. Assuming simple trend, what
elixir [45]

Answer:

25%

Explanation:

Using simple trend, to calculate the predicted sales/profit of 2018, we use;

(percentage sales of 2017 - percentage sales of 2016) ÷ percentage sales of 2016.

we have,

percentage sales in 2018 = <u>20 - 16</u>

                                              16

                                        =  <u>4</u>

                                           16

                                       = 0.25.

Percentage sales in 2018 = 25% i.e 0.25 x 100%

Cheers.

6 0
3 years ago
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