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Verizon [17]
3 years ago
7

Suppose that borrowing is restricted so that the zero-beta version of the CAPM holds. The expected return on the market portfoli

o is 14%, and on the zero-beta portfolio it is 7%. What is the expected return on a portfolio with a beta of 0.5?
Business
1 answer:
Delvig [45]3 years ago
4 0

Answer:

10.5%

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)

where,

Risk free rate of return = 7%

Market rate of return = 14%

And, the beta is 0.5

So the expected return is

= 7% + 0.5 × (14% - 7%)

= 7% + 0.5 × 7%

= 7% + 3.5%

= 10.5%

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Johnson Co. and Peabody Enterprises are both manufacturers of plastic products. These two firms have decided to work together to
Alina [70]

Answer: strategic alliance

Explanation:

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This is used by the companies since the two companies are each going to assign two engineers to this project and have agreed to share any and all costs.

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3 0
3 years ago
Conchita is applying for a VA loan. She has served in the military, on active service, for ninety days. She is trying to buy a t
LUCKY_DIMON [66]

Answer:

No, Conchita will not be considered for a VA loan.

Explanation:

In order for a Veterans Affairs (VA) loan to be given, the borrower must comply with the following conditions regarding service time:

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8 0
3 years ago
On January 2, 2020, Concord Corporation began construction of a new citrus processing plant. The automated plant was finished an
kkurt [141]

Answer:

$120,820

Explanation:

The calculation of interest capitalized for 2020 is shown below:-

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02-Jan-20        $607,000           12 ÷ 12        $607,000

01-Sep-20         $1,803,600        4 ÷ 12          $601,200

31-Dec-20          $1,803,600        0 ÷ 12         $-

Accumulated

Expenditures      $4,214,200                          $1,208,200

Interest Capitalized for 2020 = Total Average × Percentage of construction loan

= $1,208,200 × 10%

= $120,820

So, for computing the  interest capitalized for 2020 we simply multiply the total average with percentage of construction loan.

8 0
3 years ago
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