Answer:
Market risk premium.
Explanation:
The difference between average annual returns on common stocks and returns on long-term government bonds is called a market risk premium.
Basically, market risk premium is typically determined by taking the slope of a security market line (SML); which is used by economist as a graphical representation of the capital asset pricing model (CAPM).
Market premium risk is used to determine the quantitative measure of the extra return demanded by market participants for the increased risk.
Answer:
The plot of the yields is attached.
Explanation:
i) 6%, 7%, 8%, 7%, 6%
Interest rate on 1 year maturity = 6%/1 = 6%
Interest rate on2 year maturity = (6%+7%)/2 = 6.5%
Interest rate on 3 year maturity = (6%+7%+8%)/3 = 7%
Interest rate on 4 year maturity = (6% + 7% + 8% + 7%)/4 = 7%
Interest rate on 5 year maturity = (6% + 7% + 8% + 7% + 6%)/7 = 6.8%
ii)6%, 5%, 4%, 5%, 6%
Interest rate on 1 year maturity = 6%/1 = 6%
Interest rate on 2 year maturity = (6% + 5%)/2 = 5.5%
Interest rate on 3 year maturity = (6% + 5% + 4%)/3 = 5%
Interest rate on 4 year maturity = (6% + 5% + 4% + 5%)/4 = 5%
Interest rate on 5 year maturity = (6% + 5% + 4% + 5% + 6%)/5 = 5.2%
Answer:
The correct answer is D.
Explanation:
Giving the following information:
Sales:
January=$220,000
February= $260,000
It is expected that 75% of its sales will be collected in cash during the month of sale, and the remaining 25% will be collected in the month following the sale.
<u>Cash collection:</u>
From January= 220,000*0.25= 55,000
From February= 260,000*0.75= 195,000
Total cash collection= $250,000
Answer:
The total direct materials cost variance is $3,790 favorable
Explanation:
The computation of the total direct materials cost variance is shown below:
Total direct materials cost variance = Actual cost - standard cost
where,
Actual cost is $267,790
And, the standard cost = Actual finished units produced × Direct materials standard
= 22,000 × $12
= $264,000
Now put these values to the above formula
So, the value would equal to
= $267,790 - $264,000
= $3,790 favorable
Answer:
Letter B is correct.
Explanation:
Nontrier users are those who do not use one has a preference for using any brand and therefore do not recognize the marketing or discounts offered by a brand. Usually these users do not choose to buy a specific brand, but they are users, so there are marketing strategies that if well used and targeted can change the perception of the brand to attract these users.
