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Damm [24]
3 years ago
14

We Do Bankruptcies is a law firm that specializes in providing advice to firms in financial distress. It prospers in recessions

when other firms are struggling. Consequently, its beta is negative, −0.2. a. If the interest rate on Treasury bills is 6% and the expected return on the market portfolio is 16%, what is the expected return on the shares of the law firm according to the CAPM?
Business
1 answer:
joja [24]3 years ago
8 0

Answer:

4%

Explanation:

In this question, we apply the Capital Asset Pricing Model (CAPM) formula which is shown below

Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)

= 6% - 0.2 × (16% - 6%)

= 6% - 0.2 × 10%

= 6% - 2%

= 4%

The (Market rate of return - Risk-free rate of return)  is also known as market risk premium

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You determine that a robot welder is malfunctioning on your assembly line because final inspection has revealed a loose connecti
mihalych1998 [28]
<h2>Problem analysis is the management skill that is displayed in the question.</h2>

Explanation:

Option 1: Job Knowledge

This option is closely associated with the question but not right. Only the job knowledge cannot solve the issue. You need an additional skill of problem solving to fix or identify the issue.

Option 2: Information processing

Processing the information is not the required skill to analyze the given problem.

Option 3: Problem analysis

Here there is a loose connection inspected. So inspection is one kind of analysis of problem. This skill is important for the given situation.

Option 4: Initiative

Initiative is one of the soft skill but this skill will not be used in analysis of a problem.

8 0
3 years ago
Kaye Blanchard is 50 years old. She has $48,000 of adjusted gross income and $11,600 of qualified medical expenses. She will be
Mariana [72]

Answer:

$6,800

Explanation:

Calculation for How much of a tax deduction will Kaye be able to deduct (assume 10% floor for deduction)

Tax deduction=$11,600-(10%*$48,000)

Tax deduction=$11,600-$4,800

Tax deduction=$6,800

Therefore the amount of tax deduction that Kaye will be able to deduct (assume 10% floor for deduction) is $6,800

6 0
3 years ago
If the company budgets to need 4000 units to sell for a month, has a beginning inventory of 1000 units and a desired ending inve
Alecsey [184]

Answer:

5,500 units

Explanation:

The computation is shown below:

Given that

Need to sell the units in a month = 4,000 units

Beginning inventory = 1,000 units

Desired ending inventory = 2,500 units

So, by considering the above information, the units to be produced is

= Desired ending inventory + need to sell the units in a month - beginning inventory

= 2,500 units + 4,000 units - 1,000 units

= 5,500 units

5 0
3 years ago
| 50 POINTS | If The Oil Prices Around The World Rise , What Will Happen To The Oil Production In Texas?
timofeeve [1]
The oil will increase in texas
5 0
3 years ago
Read 2 more answers
A sunk cost: Requires a current outlay of cash. Is the lost benefit of choosing an alternative course of action. Is irrelevant i
igor_vitrenko [27]

Answer:

Is irrelevant in decision making

Explanation:

Since the suck cost is the cost that no longer is recovered so it should not be a factor to consider when making a decision. For example, you have bought a cinema ticket for this evening, but it is heavily rainy so you may get sick if you go to the cinema. The fact that you have paid for this ticket should not consider whether to go or stay home since you can not get this amount of money no matter what happens.

5 0
3 years ago
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