Here are data on two companies. The T-bill rate is 4% and the market risk premium is 6%.What would be the fair return for $1 Dis
1 answer:
Answer:
13%
Explanation:
Please find attached a table containing further information needed to answer this question
According to the capital asset price model: Expected rate of return = risk free + beta x (market rate of return - risk free rate of return)
Expected rate of return = risk free + beta x market premium
Beta measures systemic risk
The higher beta is, the higher the systemic risk and the higher the compensation demanded for by investors
4% + (1.5 x 6%) = 13%
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In the graph above, the point E represents values which are unattainable with current resource use and current technology.
<h3>What point is the unattainable point in the PPC?</h3>PPC refers to production possibility curve, This is a curve that shows the relationship between available resources to what can be attained.
The points outside the curve implies that the producer cannot achieve what they want given the available resources in the economy, however if the points are within the curve the available resources can meet with the intended production
Point E is a is a point that is beyond the graph, that is outside the graph. The resources available cannot attain production.
Read more on the PPC here; brainly.com/question/21639807
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<h3>Complete question</h3>This is an attachment
