Answer:
Option (B) 5.5%
Explanation:
Data provided in the question :
Factor Risk premium
Factor 1 5%
Factor 2 3%
Beta of stock A on factor 1 = 1.4
Beta of stock A on factor 2 = 0.5
Expected return = 14%
Now,
Expected return
= Risk free rate + (Beta of factor 1 × Risk premium of factor 1) + (Beta of factor 2 × Risk premium of factor 2)
or
14% = Risk free rate + (1.4 × 5%) + (0.5 × 3%)
or
14% = Risk free rate + ( 7% + 1.5% )
or
Risk free rate = 5.5%
Hence,
Option (B) 5.5%
Answer:
Different types of management systems ranging from the point-of-sale systems, accounting systems, lead management, e-commerce, communication systems, and project management solutions are available to small businesses for the smooth running of operations.
Explanation:
Answer:
$1,500,000
Explanation:
County receives funding from numerous sources. County has no control to introduce new taxes or increasing current taxes, except for property tax.
Given:
County collected for a school district = $1,000,000
County for General Fund = $5,000,000
For town located in the County = $500,000
Hardin County Agency Fund = County for school + County for a town
= $1,000,000 + $500,000
= $1,500,000
Answer: The higher the risk, the higher the return.
Returns from an investment refers to the gains or losses over a specified period, and is quoted as percentage.
Risk refers to the possibility or the chance that the actual return that is earned is greater than or less than the return expected by the investor. Thus, uncertainty is another name for risk.
If the returns from an investment are certain, the risk involved is low. When risk is low, the returns are also low. For e.g. the return from a T-bill is low because the risk of default is zero, since the government can print money to fund its debt.
The higher the level of risk involved, the greater the potential for a higher return.
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
