1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
marissa [1.9K]
3 years ago
11

Which of the following is consistent with the CAPM and efficient capital markets? A) A security with a beta of 1 has a return la

st year of 8% when the market has a return of 12%. B) Small stocks with a beta of 1.5 tend to have higher returns on average than large stocks with a beta of 1.5. C) A security with only diversifiable risk has an expected return that exceeds the risk-free interest rate.D) A security with only systematic risk has an expected return that exceeds the risk-free interest rate.
Business
1 answer:
Rus_ich [418]3 years ago
6 0

A security with a beta of 1 has a return last year of 8% when the market has a return of 12%.

Answer: Option A

<u>Explanation:</u>

In a market of the capitals, the return that a person will get from the security will depend upon the risk that has been associated with that security. The CAPM says that the return of the security that a person will get depend upon the beta of the security. Here beta is the measure with which we can measure the risk of the security. It is an absolutely correct measure of the security risk.

You might be interested in
Tom tries to sell his classic car to Victoria for $12,000. Tom tells Victoria, "I paid $12,000 for the car in 1978 and it's wort
gulaghasi [49]

Answer:

B) Tom's statements provide grounds to set the contract aside.

Explanation:

When we are talking about setting a contract aside, it means that the contract is voidable. A voidable contract is valid until one of the parts decides to void it. In this case, if Victoria decides to purchase Tom's car and later discovers that he lied about the price, she can void the contract and return the car to get her money back.

What Tom is doing is basically lying about the material facts of the product that they are bargaining and it represents a valid reason for voiding the contract.

5 0
2 years ago
A list of Year 3 revenues and expenses for Green Thumb, Inc. is provided below. Advertising and Promotion Expenses 262,700 Incom
iren2701 [21]

Answer:

A. Net Income = $304,560

B. Ending Retained Earnings = $420,740

Explanation:

Req. (A)

Green Thumb, Inc.

Income Statement

For the year ended, 31 December, 20Y3

Revenues:

Sales Revenues $1,866,300

Expenses:

Salaries and wages expenses $725,000

Advertising and Promotion Expenses 262,700

Income Tax Expense 56,520

Interest Expense 43,920

Other Expenses 122,600

Other Selling & Administrative Expenses 351,000

Total Expenses = ($1,561,740)

Net Income = $304,560

Note: We can use a multiple step income statement. However, as there is no instruction, we use single step income statement.

Req. (B)

Green Thumb, Inc.

Statement of Retained Earnings

For the year ended, 31 December, 20Y3

Balances, January 1 $162,200

Add:

Net income for the current year $304,560

Less: Dividends ($46,020)

Balances, December 31 $420,740

Note: Here, Balances, January 1 = Beginning Retained earnings Balance

Balances, 31 December = Ending retained earnings.

3 0
3 years ago
A company with excess capacity must decide between scrapping or reworking units that do not pass inspection. The company has 13,
Anit [1.1K]

Answer:

Incremental income for Sale as scrap  is $36,400 and Rework is $46,200

Explanation:

                                                              Sale as scrap         Rework

Sales of reworked units (13000*8.2)                                  $106,000

Sales of scrap units (13000*2.8)            $36,400

Cost to rework units (13000*4.6)                                         ($59,800)

Opportunity cost of not making new units

Incremental income (loss)                      $36,400              $46,200

6 0
2 years ago
The marketing department of a reputable firm wants to improve strategic decision making, track the actions of other players in t
Snowcat [4.5K]

Answer:

The answer is C. competitive marketing intelligence

Explanation:

Competitive marketing intelligence may be a powerful research-based method employed by a company to collect, analyze, and use information collected on competitors, economic conditions, customers etc to a achieve business's competitive advantage.

The information-gathering analysis process can help a corporation develop its strategy or identify competitive gaps. It identifies threats and opportunities within the business

3 0
3 years ago
The required reserve ratio is 0.05. If the Federal Reserve buys​ $1,000,000 worth of bonds from a bond dealer who has her accoun
Radda [10]

Missing information:

total deposits in bank XYZ = $4,000,000

total reserves = $3,800,000

Answer:

the required reserve = $250,000

excess reserves = $4,550,000

Explanation:

required reserve ratio = 5%

the Fed buys $1,000,000 worth of bonds

the $1,000,000 are deposited entirely in bank XYZ

total checkable deposits will increase to $5,000,000

the required reserve = $5,000,000 x 5% = $250,000

excess reserves = total checkable deposits - total loans - required reserves = $5,000,000 - $200,000 - $250,000 = $4,550,000

5 0
3 years ago
Other questions:
  • Don (67) and Carol (66) are married and file a joint return. Their gross income (including 1/2 of their social security) for 201
    6·1 answer
  • May, Inc. had the following transactions in 2019, its first year of operations: Issued 22,000 shares of common stock. The stock
    11·1 answer
  • Which of the following is a form of direct intense and detailed training?
    6·1 answer
  • Over the last two decades the combination of the internet, high definition TV, and the surround sound has revolutionized watchin
    10·1 answer
  • Large aircraft producers such as the Boeing Company normally use: Select one: a. Job order costing. b. Process costing. c. Mixed
    15·1 answer
  • What are Pros and cons of perfect competition?
    5·2 answers
  • A project has an initial cost of $50,000. The incremental inflows associated with the project are $20,000 in year one, $15,000 i
    8·1 answer
  • IN POKER IS IT - 9 - 10 - J - Q - K ??? Or is it 9,10,j,K,Q ??? Or does it matter
    9·2 answers
  • Look at the picture, which one is the correct answer?
    12·1 answer
  • 1. What is the "Term" for the Lease and Financing of a Car mean?
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!