1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
xz_007 [3.2K]
3 years ago
6

A stock with a beta of 1.2 has an expected rate of return of 16%. If the market return this year turns out to be 10 percentage p

oints below expectations, what is your best guess as to the rate of return on the stock?
Business
1 answer:
KiRa [710]3 years ago
7 0

Answer:

rate of return on the stock is 4%

Explanation:

given data

stock beta = 1.2

expected rate of return = 16%

market return = 10%

to find out

rate of return on the stock

solution

we get here rate of return on the stock hat is express as

rate of return on the stock = expected rate of return - ( stock beta × market return )   ...........................1

put here value we get

rate of return on the stock = 16 % - ( 1.2 × 10% )

rate of return on the stock = 0.16 - ( 1.2 × 0.10 )

rate of return on the stock = 0.16 - 0.12

rate of return on the stock = 0.04

rate of return on the stock is 4%

You might be interested in
The production function for earthquake detectors​ (Q) is given as​ follows: Q​ = 4K​1/2L​1/2 where K is the amount of capital em
Ksivusya [100]

Answer:

k= 5 units

L = 45 units

Explanation:

check the picture attached for full explanation and i hope it helps you

3 0
3 years ago
Read 2 more answers
At a price of $0.50, how many more or fewer cups of lemonade do caroline and emily sell when the temperature is 60 degrees than
djverab [1.8K]

At a price of $0.50, the amount of cups of lemonade that Caroline and Emily sell when the temperature is 60 degrees than when the temperature is 80 degrees is <u>-</u><u>1</u><u>5</u>.

50 - 80 = -30

= -30 * 0.5

= - 15

<h3>How does one arrive at the answer?</h3>

This is an instance of demand curve shift which refers to key changes in the balance of supply and demand that alter the quantity demanded at the same price. Hence, the shift in the quantity demanded will affect the amount of cups of lemonade that is sold.

Sometimes questions that involve graphs will ask you to consider the effect of a changing factor or factors. Problem statement: the line labeled D1 in the graph to the right shows the number of cups of lemonade that Caroline and Emily can sell at their lemonade stand at various prices.

Caroline and Emily have noticed that they sell more lemonade when it's hotter. Click anywhere on the graph to open a window with a control labeled Temperature. If you use the slider to change the temperature, the line will shift. Change the temperature from 80 degrees to 50 degrees.

At a price of $0.50, the amount of cups of lemonade that Caroline and Emily sell when the temperature is 60 degrees than when the temperature is 80 degrees is<u> -15</u>.

Therefore, the correct answer is as given above

learn more about demand curve: brainly.com/question/16790743

#SPJ1

3 0
1 year ago
When the price of a good increases, it undoubtedly hurts individual consumers, since they now have to pay more for a particular
ludmilkaskok [199]

Answer:

The answers that apply are:

(B) The price for a hunting license is increased in an effort to reduce the number of hunters.

(C) A law is passed increasing the price of cigarettes in an effort to decrease secondhand smoke.

Explanation:

Hunting is a practice that governments are trying to control and decrease.  So if government want to decrease the amount of people hunting they should increase the price of the licence.

Smoking is unhealthy,  so the law increase the price for healthy reasons.  

5 0
3 years ago
Common stock valuelong dash—Variable growth Personal Finance Problem
xenn [34]

Answer:

$24.18

Explanation:

Dividend for year 0 = $2.2

Dividend at year end 1 = $2.2

Dividend at year end 2 = $2.2(1 + .05) = 2.31

Dividend at year end 3 = $2.31 (1 + .05) = 2.4255

Dividend at year end 4 = $2.4255 (1 + .17)= 2.8378

Dividend at year end 5 = $2.8375 (1 + .09)= 3.0932

Dividend at year end 6 = $3.0932 (1 + .09) = 3.371

MPS = \frac{D_{1} }{(1\ +\ k)^{1} }  + \frac{D_{2} }{(1\ +\ k)^{2} } \ +\ \frac{D_{3} }{(1\ +\ k)^{3} } \ +\ \frac{D_{4} }{(1\ +\ k)^{4} }  +\ \frac{D_{5} }{(1\ +\ k)^{5} } \ + \frac{1}{(1\ +\ k)^{5} }  [\frac{D_{6} }{(k\ -\ g)\ ]}

where MPS = Market price of share

          D= Dividend for different years

          k = Cost of equity

          g= constant growth rate after year 5

putting values in above equation we get,

MPS = 1.864 + 1.65 + 1.478 + 1.463 + 1.352 + 0.4371 × 37.462

MPS = $24.18

The maximum price per share that an investor who requires a return of 18% should pay for Home Place Hotels common stock is <u>$24.18</u>

4 0
3 years ago
Money that you owe the Internal Revenue Service because you did not pay enough in over the year is known as a ________________.
matrenka [14]

Answer:

Tax due or tax bill any one of them

5 0
2 years ago
Other questions:
  • 6. Describe at least 5 skills or characteristics you could develop while working for someone else
    10·1 answer
  • You currently own a portfolio valued at $52,000 that has a beta of 1.16. you have another $10,000 to invest and would like to in
    11·1 answer
  • What would happen to the buying power of your investment after one year if your rate of return was 8% and the rate of inflation
    13·1 answer
  • Lincoln Park Co. has a bond outstanding with a coupon rate of 5.75 percent and semiannual payments. The yield to maturity is 4.7
    13·1 answer
  • Once something is considered scarce, it is scarce forever. <br> A. True<br> B. False
    9·1 answer
  • Which of the following would tend to shift the supply of dollars in the market for foreign-currency exchange in the open-economy
    9·1 answer
  • A type of chart that uses vertical bars to compare data is called a
    7·1 answer
  • A fund has a Beta of 1.25, Standard Deviation of 7%, and an expected return of 12%. If the risk free rate is 2%, calculate the T
    8·1 answer
  • To determine if the bank's Web site is secure, look at the web site address.<br><br> True<br> False
    10·1 answer
  • What is the present value of a series of payments received each year forever, starting with $1,000 paid one year from now and th
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!