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FromTheMoon [43]
3 years ago
8

A stock has an average expected return of 10.8 percent for the next year. The beta of the stock is 1.22. The T-Bill rate is 5% a

nd the T-Bond rate is 3.4 %. What is the market risk premium
Business
1 answer:
uranmaximum [27]3 years ago
7 0

Answer: 4.7%

Explanation:

Expected return is calculated as:

= Risk free return + Beta ( Market risk premium)

10.8% = 5% + (1.22 × Market risk premium)

10.8% - 5% = 1.22market risk premium

5.8%/1.22 = market risk premium

Market risk premium = 0.058/1.22

Market risk premium = 0.047

Market risk premium = 4.7%

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2 3/10 miles is the answer.
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Which type of communication takes place in the absence of words? communication refers to communication that takes place without
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Why was money scarce when crops produced a good profit? savestylesformat instructions?
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3 years ago
Assume that the money demand function is (M / P)d = 2,200 – 200r, where r is the interest rate in percent. If the price level is
Wittaler [7]

Answer:

The money supply should be set at 800

Explanation:

In this question, we are asked to calculate the value at which Fed should set the money supply at after fixing the interest rate at 7 percent.

We proceed as follows;

Let the new money supply be M.

To fix the interest rate at 7%, r= 7 and P = 2

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= 2200 - 200(7)

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= 800

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8 0
3 years ago
Julie and Barry Spinos purchased a house for $96,400. They made a 25 percent down payment and financed the remaining amount at 5
Alinara [238K]

Answer: $79.30

Explanation:

Cost of the house = $96400

Down payment = 25% × $96400 = $24100

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Time = 5 years

Monthly payment.= $410.66

The interest for first payment will be:

= $72300 × 5.5% × 1/12

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Therefore, the amount of the first monthly payment is used to reduce the principal will be:

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= $79.30

5 0
2 years ago
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