Answer:
expected return on market = 0.10373 or 10.373%
Explanation:
Using the CAPM, we can calculate the required/expected rate of return on a stock. This is the minimum return required by the investors to invest in a stock based on its systematic risk, the market's risk premium and the risk free rate.
The formula for required rate of return under CAPM is,
r = rRF + Beta * rpM
Where,
- rRF is the risk free rate
- rpM is the market risk premium
We will first calculate the market risk premium using the required rate of return for stock, beta and risk free rate and plugging these values in the formula above.
0.1330 = 0.058 + 1.64 * rpM
0.1330 - 0.058 = 1.64 *rpM
0.075 = 1.64 * rpM
rpM = 0.075 / 1.64
rpM = 0.04573 or 4.573%
As we know that the beta for market is always equal to 1, we can calculate the rate of return for market as,
expected return on market = 0.058 + 1 * 0.04573
expected return on market = 0.10373 or 10.373%
I think its all the above except for they might be trying to trick you because at sixteen a guardian or parent has to sign aswell.
The maximum amount of new loans the bank can extend is $800,000.
<h3>What is the maximum amount of new loans the bank can extend?</h3>
The reserve ratio is the amount of deposits that must be kept as reserves with the central bank. The money that is not kept as reserves can be used to create loans.
Maximum loan amount = deposit - (reserve ratio x deposits)
1,000,000 - (0.2 x 1,000,000) = $800,000
To learn more about required reserves, please check: brainly.com/question/26960248
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Answer:
The aggregate investment of the project is $1,000,000
Explanation:
Total or the aggregate investment is the term which is described as the amount of money which a person or a company needed or required to complete the task, work or the project.
In this situation, the project needed a purchase of equipment which is worth $1,000,000 due to which there is increase in inventory as well as increase in accounts payable. Therefore, the total investment amounts to $1,000,000.As the equipment is the necessary item in order to complete the project and due to which the inventory rise and also the equipment is purchased on credit because of which the accounts payable also increase.
