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svlad2 [7]
3 years ago
11

stock y has a beta of 1.5 and an expected return of 16.35. what is the risk free rate if the market return is 12.5%

Business
1 answer:
ratelena [41]3 years ago
5 0

Answer:

the risk free rate of return is 4.8%

Explanation:

The computation of the risk free rate of return is shown below:

As we know that

Expected rate of return = Risk free rate of return + beta × (market rate of return - risk free rate of return)

Here we assume the risk free rate of return be x

So ,

16.35% = x + 1.5 × (12.5% - x)

16.35% =  x + 18.75% - 1.5x

16.35% - 18.75% = -0.5x

x = 4.8%

Hence, the risk free rate of return is 4.8%

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A NASDAQ security is bid at $30.25 and offered at $30.75. An over-the-counter trader effects a trade at $30.75 and charges a com
Angelina_Jolie [31]

Answer:

$30.75

Explanation:

Given that

Security bidding = $30.25

Offered price = $30.75

over the counter trading = $30.75

Commission charged = $0.50

based on the above information, the price that shows on the tape is equivalent to the over the counter trading price i.e $30.75 also it does not include the commission charged i.e $0.50

Hence, the price is $30.75

6 0
3 years ago
A country implements policies that are expected to increase taxes by €100 million, increase government spending by €50 million,
Bezzdna [24]

Answer:

A) Increase by 50 million

Explanation:

A is correct.

Below is the current account balance calculation

CA = Sp -I + (T-G- R)

CA stands for Current account balance

Sp stands for Private sector savings

I is Investments, T = Taxes

G represents government spending's, whereas R = Transfers

CA = -25-(-25) + ( 100-50-0 ) = 50, increase by 50 million euro

5 0
4 years ago
Crawford Company started the year with $60,000 in its Common Stock account and a credit balance in Retained Earnings of $44,000.
umka2103 [35]

Answer:

b. $72,000

Explanation:

Retained EarningEnding Balance = Opening Balance of retained earning + net income - Dividend Declared

Retained EarningEnding Balance = $44,000 + $48,000 - $20,000

Retained EarningEnding Balance = $44,000 + $48,000 - $20,000

Retained EarningEnding Balance = $72,000

The issue of common stock will not effect retained earning account balance It will be credited to common stock account and add-in-capital common stock account.

7 0
3 years ago
Simon, a trainer, meets with his team to discuss the possibility of senior engineers training the new engineers. He also meets w
snow_tiger [21]

Answer and Explanation: Under the given case or scenario, we can state that Simon is at the step of gathering the facts, information and data and therefore organizing these facts.  Here, in this case it is provided that Simon is a trainer that on meeting with his team wishes to discuss the fact that there is a need of senior engineers training the new engineers.

5 0
3 years ago
In an effort to promote rapid growth, the government of Cashland has kept taxes low, offered little regulation of business activ
Tanya [424]

Answer:

<em>Explained below.</em>

Explanation:

The government of Cashland government<em> should approach toward achieving economic goals.</em>

At the beginning economic goals should be achieved by the capitalist (capitalist is a person who starts an organisation or a business by investing his or her money).

But if the capitalist goes through  the current pressures, then the capitalist should be advised to adopt a more socialist approach when he or she faces the situation again in the up-coming time.

7 0
4 years ago
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