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ch4aika [34]
4 years ago
7

Consider the multi-factor APT model with two-factors. The risk premium on factor 1 and 2 portfolios are 8% and 3% respectively.

Stock A has a beta of 1.3 on factor 1 and a beta of 0.7 on factor 2. The expected return on Stock A is 14%. If no arbitrage opportunities exist, the risk free rate is:
Business
1 answer:
Afina-wow [57]4 years ago
5 0

Answer:

12.5%

Explanation:

Expected return = Risk free rate + (Beta of factor 1 * Risk premium of factor 1) + (Beta of factor 2 * Risk premium of factor 2)

14 = Risk free rate + (1.3*8) + (0.7*3)

Risk free rate = 12.5%

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Imagine that both the skycar and jet powered wing become sold commercially. What hospitality and tourism businesses might develo
Nataly_w [17]

Explanation:

Companies could improve and implement differentiated services for customers.

What could probably happen is that tour companies offer a personalized service, faster and cheaper with the possibility of purchasing a skycar and jet, as hotel guests usually make a tour itinerary that requires high mobility costs, therefore offering this differentiated and cheaper service directly at the establishment would mean a focused differentiation strategy that would add several benefits, such as increased profitability and customer loyalty.

7 0
4 years ago
Describe the key elements of IKEA’s globally successful business model. What are the sources of IKEA’s competi-tive advantage?
elena-14-01-66 [18.8K]

Answer:

following are the solution to this question:

Explanation:

The key factors for IKEA's growth are as follows:

It made simple to use goods as well as the technique of "do it yourself" allows employees to increase costs lower, prices fair, a good understanding of the population it wants to target, goods clean with a clear aesthetics.

These were also regarded for fair payer money for staff and vendors, as well as the mechanism is open. Its shops also provide accommodation for the whole family.

7 0
3 years ago
Martha signs a listing agreement with Broker Patrick. Which of the following would probably not be found in the agreement they s
Vlad [161]

Answer:

4. Martha's average utilities

Explanation:

As in the question, it is given that Martha has signed a listing agreement with the Broker Patrick.  

The listing agreement refers to a contract between the real estate broker and the real estate owner that allows the broker the authority to act as a property sales agent.

The terms and conditions which are mentioned the listing contract are presented below:

a. Starting and expiration date of the contract

b. Patrick's commission

c. Martha's priced. Other terms and conditions

8 0
4 years ago
Cost Flow Relationships The following information is available for the first year of operations of Creston Inc., a manufacturer
babunello [35]

Answer:

The answer is

A. $955,700

B. $570,900

C. $734,400

Explanation:

A. Cost of sales

Gross profit = Sales - Cost of sales.

Therefore, Cost of sales will now be:

Sales - Gross profit

$1,309,200 - $353,500

=$955,700

B. Direct materials cost

Direct materials cost = material purchased - indirect materials - ending material Inventory

$667,700 - $48,400 - $48,400

=$570,900

C.Direct labor cost

Direct labor cost = manufacturing costs for the period - Direct materials cost - Other factory overhead - Indirect labor

$1,445,400 - $570,900 - $22,300 - $117,800

=$734,400

7 0
4 years ago
Charging high prices to earn large profits during a time when there is little competitionrepresents a ________ strategy:________
Olin [163]

Answer:

Skimming

Explanation:

Price skimming, also known as skim pricing, is a pricing strategy used by those who face little or no competion, what normally happens is that a firm charges a high price and then gradually may need to lowes the price to attract more customers.

Price skimming is used to earn large profits especiallyn when a new product or service is introduced into the market. The pricing strategy is largely useful iwhen the firm is the first to enter the marketplace. The aim of this is to generate the large profit in the shortest time possible.

6 0
4 years ago
Read 2 more answers
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