Given:
<span>General pharmacy’s stock has a beta of 1.8 and an expected return of 14%,
Sicoras corp.’s stock has a beta of 1.5 and an expected return of 16.2%.
Let Rf stand for risk free rate.
Let Rm stand for expected market return.
General Pharmacy: 14% = Rf + 1.8(Rm-Rf)
Sicoras Corp.: 16.2% = Rf + 1.5(Rm-Rf)
0.14 = Rf + 1.8Rm - 1.8Rf
0.14 = Rf - 1.8Rf + 1.8Rm
0.14 = -0.8Rf + 1.8Rm
0.14 + 0.8Rf = 1.8Rm
Rm = 0.14/1.8 + 0.8Rf/1.8
Rm = 0.078 + 0.444Rf
</span><span>0.162 = Rf + 1.5(Rm-Rf)
</span>0.162 = Rf + 1.5[(0.078+0.444Rf) - Rf]
0.162 = Rf + 0.117 + 0.666Rf - 1.5Rf
0.162 - 0.117 = Rf + 0.666Rf - 1.5Rf
0.045 = 0.166Rf
0.045/0.166 = Rf
0.271 = Rf
<span>Rm = 0.078 + 0.444Rf
</span>Rm = 0.078 + 0.444(0.271)
Rm = 0.078 + 0.120
Rm = 0.198
Rf = 27.1% ; Rm = 19.8%
The risk free rate is 27.1% and the expected market return is 19.8%.
To check, simply substitute the value of Rf and Rm in the above equation.
Answer:
household buying goods and services in the product market
Explanation:
The product market is where final goods and services are sold to households and firms.
The factor market is where factors of production are exchanged.
Mary is buying food for her cat. There are no indications that Mary is a business and that the food is a factor of production. Therefore, Mary is an household and she's purchasing from the product market.
I hope my answer helps you
Answer:
The correct statement is: "The fixed cost per unit will decrease when volume increases."
Explanation:
Total fixed costs remain the same within a relevant range, but the <em>fixed cost per unit</em> decreases as production increases, because the same fixed costs are spread over more units produced.
A non-linear production is also known as a bending producing model. A non-linear production possibilities model estimates what amount of something can be produced using the economy's current resources and technology to make the predictions.
Answer:
$56.74
Explanation:
Base on the scenario been described in the question, we can use the following method to solve the problem
Solution Correct Response Calculate the amount financed, the finance charge, and the monthly payments for the following add-on interest loan. Purchase(Cash) Price Down Payment Amount Financed Add-onInterest Number of Payments Finance Charge $78810% $8%12 $56.74
