Answer:
The advantage over buying the house over renting the apartment is that, you would own the house instead of just renting it. If you own the house, and the mortgage covers everything including repairs if you buy the house while if you need a repair in a rented apartment it would probably cost a fortune. Living in an apartment means that if the owner decides they want to rent the house or sell the house, that you will have to move (or pay for a mortgage which you might as well buy the house that's bigger than buy the apartment.)
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Answer:
1. 17.2%
2. 11.1%
Explanation:
From Fama and French (1992) research study, titled "The Cross‐Section of Expected Stock Returns," it was concluded that the stocks of firms within the highest decile of book-to-market ratios had an average annual return of 17.2%, while the stocks of firms within the lowest decile of book-to-market ratios had an average annual return of 11.1%
Hence, the correct answer is 17.2% and 11.1% respectively.
Answer:
A. Explain how the above (free market competition) would be an advantage for you, the consumer.
Free market competition is advantageous to the consumer because it promotes the supply of many goods and services, at a lower price than other market structures like oligopoly or monopoly.
In the free market, there are many firms, none have market power, and they produce goods and services that have many substitutes. This means that if a firm raises the price of a good, consumers simply flock to another firm that offers a similar product. This mechanism obliges firms to offer their goods at the market-clearing price, which is the best price for the consumer.
B. Describe how an oligopoly OR monopoly could inhibit competition among businesses.
Oligopolies ocurr when there are only a few firms in the market, and monopoly ocurrs when there is only one firm. These two market structures allow firms to charge higher prices than the market-clearing price, and to supply less quantity than the market-clearing quantity.
Besides, oligpolies and monopolies are characterized by high barriers to entry and exit, which keep potential competing firms out of market, inhibiting competition.
Answer:
The average expected rate of return on the market portfolio is 10 percent.
Explanation:
The CAPM (fixed asset pricing) model describes the relationship between systematic risk and expected return on assets, especially stocks. CAPM is widely used throughout the financial community to value high-risk securities and achieve the expected returns on assets when taking into account the risk of those assets and the cost of capital.
The formula for calculating the expected return on an asset taking into account its risk is as follows:
ERi = Rf + βi (ERm - Rf)
where:
ERi = expected return on investment
Rf = risk-free interest rate = 4 percent.
βi = beta inversion =1.0
(ERm −Rf) = market risk premium = 6 percent.
ERi = 4 + 1 ×(6) =10
The average expected rate of return on the market portfolio is 10 percent.
Structural unemployment can be caused by all of the following except fluctuations in the business cycle.
<h3>
What is Structural unemployment ?</h3>
Structural unemployment is long-lasting unemployment that comes about due to shifts in an economy.
Structural unemployment is caused by a mismatch of skills between the unemployed and available jobs. Structural unemployed is caused by changes in the economy, such as deindustrialization, which leaves some unemployed workers unable to find work in new industries with different skill requirements.
This type of unemployment happens because though jobs are available, there's a mismatch between what companies need and what available workers offer.
For example, employees who produce a specialty clothing product that suddenly is no longer a trend might lose their position producing this specific product, causing structural unemployment.
To learn more about Structural unemployment , refer
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