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mestny [16]
3 years ago
9

According to the capital asset pricing model, the expected return on a security is: Group of answer choices positively and linea

rly related to the security's variance. positively and non-linearly related to the security's variance. positively and linearly related to the security's beta. positively and non-linearly related to the security's beta.
Business
1 answer:
Delicious77 [7]3 years ago
5 0

Answer:

e. the expected return on a security is positively and linearly related to the security's beta.

Explanation:

As per CAPM: Expected return (ER) = Rf + \beta (Rm - Rf)

Lets assume risk free return (Rf) as 5%, \beta as 2 and expected market return (Rm) as 10%

then, ER = 5% + 2 (10% - 5%) = 15%

However if lets assume all the other factors remain the same and \beta increases to 3

then, ER = 5% + 3 (10% - 5%) = 20%

Similarly if \beta reduces to 1

then, ER = 5% + 1 (10% - 5%) = 10%

So higher the \beta higher is the risk and hence higher the expected return. Hence expected return on a security is positvely and linearly related to the security's beta

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In the books of seller, ____ is deducted from the invoice price when the buyer pays earlier or on the date/term stipulated
BartSMP [9]

Not enough information to answer the question, sorry.

5 0
2 years ago
A financial asset is liquid: Group of answer choices if it can be readily exchanged for another asset or good. if it is held by
vodomira [7]

Answer:

if it can be readily exchanged for another asset or good

Explanation:

An asset is liquid if it can be easily be exchanged for another asset or good or converted to cash. cash ( currency)  is the most liquid asset.

an house for example is less liquid when compared to cash. this is because before it can be converted to cash or exchanged for another asset, it must first be valued, then we have to find a buyer and this process can range from days to years. this makes a house less liquid when compared with a house.

6 0
3 years ago
Which of the following compensation proposals is most likely to be in the best interest of the company’s shareholders? A base sa
lianna [129]

Answer:

A base salary of $500,000 plus a stock option package for 250,000 shares, with 20% of shares maturing at the end of each of the next five years

Explanation:

This options will force the employee to stay in the firm for at least 5 years

Also it will tie his contribution to the market share

So their interest will be alinged with the company's interest of increasing his value and project better earnings through the five years program.

3 0
2 years ago
If the inverse demand function is:
Vesnalui [34]

Answer:

-0.136 and $528

Explanation:

Given that

p = 50 - 0.5Q

where,

Q = 88

So, p equals to

= 50 - 0.5 × 88

= 50 - 44

= $6  

As it is mentioned that

p = 50 - 0.5Q

0.5Q = 50 - p

Q = 100 - 2p

And we know that

Price elasticity of demand is

= Percentage Change in quantity demanded ÷ Percentage Change in price

So,

= -2 × (6 ÷ 88)

= -0.136

And, the revenue is

= Price × Quantity

= $6 × 88

= $528

8 0
3 years ago
Which of the following typically have the highest auto insurance premiums?
igor_vitrenko [27]
Young inexperienced drivers

3 0
3 years ago
Read 2 more answers
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