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Y_Kistochka [10]
3 years ago
5

The Royal Seattle Investment Club has​ $100,000 to invest in the equity market. Frasier advocates investing the funds in KSEA Ra

dio with a beta of 1.6 and an expected return of 16.8​%. Niles advocates investing the funds in Northwest Medical with a beta of 1.1 and an expected return of 14.7​%. The club is split​ 50/50 on the two stocks. You are the deciding​ vote, and you cannot pick a split of​ $50,000 for each stock. Before you​ vote, you look up the current​ risk-free rate​ (the one-year U.S. Treasury bill with a yield of 4.00​%). Which stock do you​ select?
Business
1 answer:
madam [21]3 years ago
5 0

Answer:

Northwest Medical

Explanation:

In this question, we have to find out the risk to reward ratio for stocks

KSEA Radio = (Expected return - risk free rate) ÷ (Beta)

                     = (16.8% - 4%) ÷ (1.6)

                     = 8%

Northwest Medical = (Expected return - risk free rate) ÷ (Beta)

                               = (14.7% - 4%) ÷ (1.1)

                               = 9.72%

By comparing these two stocks, we get to know that the Northwest Medical  gives high return then the KSEA Radio .

So, Northwest Medical should be selected

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USPshnik [31]

A steel manufacturer looking for a technician to oversee their melting process

Option A

<u>Explanation: </u>

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8 0
3 years ago
If a company purchases equipment costing $4,500 on credit, the effect on the accounting equation would be: Multiple Choice Asset
Firdavs [7]

Answer: Assets increase $4,500 and liabilities increase $4,500.

Explanation:

An asset are the properties which a business or an organization owns. An asset possess an economic value.

Since the equipment purchased is an asset, this will lead to an increase of assets by $4500 and since it was bought on credit and hasn't been paid for, liabilities will also increase by $4500.

8 0
3 years ago
You own a building that has four possible uses: a cafe, a craft store, a hardware store, and a bookstore. The value of the build
Svetlanka [38]

Answer:

The opportunity cost = $2.5

Explanation:

Given:

You own a building that has four possible uses: a cafe, a craft store, a hardware store, and a bookstore. The value of the building in each use is $2,000; $3,000; $4,000; and $5,000, respectively.You decide to open a hardware store.

<u>Question asked:</u>

The <u>opportunity cost of using this </u><u>building for a hardware store</u> ?

<u>Solution:</u>

As we know:

Opportunity\ cost =\frac{What\ you\ sacrifice}{What\ you\ gain} \\ \\

What you sacrifice = Value of a cafe + Value of a craft store + Value of a bookstore

                              = $2000 + $3000 + $5000 = $10,000

What you gain = Value of a hardware store

                        = $4000

Thus, the opportunity cost of using this building for a hardware store is $2.5

7 0
3 years ago
In 2019, RayeAnn acquires a car for $14,000. She uses the car in her advertising business and for personal purposes. Her records
kirill [66]

Answer:

Deductible depreciation = $2,660

Explanation:

Given:

Amount of car = $14,000

Personal use = 30%

Business use = 70%

Total depreciation = $3,800

Deductible depreciation = ?

Computation of Deductible depreciation:

Deductible depreciation = Total depreciation × Business use percentage

Deductible depreciation = $3,800 × 70%

Deductible depreciation = $2,660

5 0
3 years ago
The third-party problem: a. occurs when a market activity leads to a negative externality.b. occurs when a market activity leads
Iteru [2.4K]

Answer:

The correct answer is letter "C": occurs when a market activity leads to a negative or a positive externality.

Explanation:

An Economic Externality is a cost or benefit paid or earned by a third party that does not have control over the factors that produced the cost or benefit. The third-party problem arises when whether negative or positive externalities affect individuals who are not involved in market activities.

4 0
3 years ago
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