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guajiro [1.7K]
2 years ago
15

A stock with a beta of 0.8 has an expected rate of return of 12%. If the market return this year turns out to be 5 percentage po

ints below expectations, what is your best guess as to the rate of return on the stock?
Business
1 answer:
Sunny_sXe [5.5K]2 years ago
8 0

Answer:

The correct answer is:  The expected rate of return for the stock would be around 7%.

Explanation:

The Beta coefficient is a numeral measure that portraits the volatility of a stock compared to the overall market performance. If a stock's beta is closed to the numerical value one (1) it implies it is highly correlated to the price movement of the overall market.

In that case, if a stock's beta is 0.8 it implies it follows the market price movements. If the stock expected rate return is 12% but the market return turns out to be 5% points below expectations, it means the stock's return would end up being around 7%.

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3 0
3 years ago
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Use the​ high-low method to determine the​ hospital's cost equation using nursing hours as the cost driver. Predict total overhe
netineya [11]

Answer: Total cost  (23500 hours predicted ) = $ 484625

Explanation:

The question is incomplete the high and low methods requires us to use high and low level of activity together with the corresponding total costs at each level to determine the variable cost per unit. we will provide assumed total costs and nursing hours in order to show how high and low method is used to predict total costs for the next period.

Assume the following were total costs and corresponding nursing hours for the previous 3 months

Total cost                Hours

$560000             30000 hours

$400000             220000 hours

$225000             10000 hours

calculating Variable cost using high and low method

Variable cost per unit  = (high cost - low cost)/high hour - low hours)

Variable Cost Per unit =  (840000 - 225000)/ (30000 - 10000) = 16.75

Variable cost per unit = $ 16.75

Fixed costs = 560000 - (28000 x 16.75) =  560000 - 469000

Fixed costs =  $91000

Total cost  (23500 hours predicted ) =Total Fixed cost + Total Variable costs

Total cost  (23500 hours predicted ) = $91000 + (23500 x $16.75)

Total cost  (23500 hours predicted ) == $91000 + $393625

Total cost  (23500 hours predicted ) = $ 484625

6 0
3 years ago
The process that falls between buying for a new need and making a routine repurchase is called
Archy [21]

Answer:

Modified Rebuy

Explanation:

Modified rebuying is the process whereby an individual or an organization makes a purchase that have been previously purchased but this times makes changes to some elements different from the previous purchase like change of suppliers, terms, price and so on. In this case, the buyer reviews the buying situation. Here, the buyer is interested in modifying the specifications of goods previously purchased.

7 0
2 years ago
Explain your return on educational investment?
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6 0
3 years ago
You invested $30,000 in BOA, $20,000 in Best Buy, and $50,000 in Harley-Davidson for your portfolio. Betas are 1.8, 1.05 and 1.5
steposvetlana [31]

Answer:

Beta= 1.5

Explanation:

<u>First, we need to calculate the proportional investment of each asset:</u>

Total investment= $100,000

BOA= 30,000/100,000= 0.3

Best Buy= 20,000/100,000= 0.2

Harley-Davidson= 50,000/100,000= 0.5

<u>To calculate the beta of the portfolio, we need to use the following formula:</u>

Beta= (proportion of investment A*beta A) + (proportion of investment B*beta B)...

Beta= (0.3*1.8) + (0.2*1.05) + (0.5*1.5)

Beta= 1.5

4 0
2 years ago
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