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monitta
2 years ago
13

The risk premium for common stocks

Business
1 answer:
Brrunno [24]2 years ago
7 0

Answer:

D

Explanation:

Risk premium is the compensation given to investors for holding risky assets. The more risky an asset is, the higher the premium.

A rational investor would be unwilling to invest in a stock that offers zero premium because there is no compensation for the risk that is borne by the investor.

Risk premium is always positive.

Risk premium = expected rate of return of the asset - expected rate of return of the risk free asset.

The more risky the asset, the higher the expected rate of return. So, the expected rate of return of the asset would always be higher than the risk free rate. This makes risk premium positive

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Examine the relationship between total spending by government and consumers in a nation and the location of the countries gdp on
Vanyuwa [196]

Answer and Explanation:

  • Consumer as well as government overall expenditure seems to be a significant determinant of economic growth during a market. Unless the overall spending increases, the demand changes positively.
  • Hence, just before the total individual and corporate expenditure in something like a firm increases, it demonstrates that perhaps the country's affairs cycle is going to expand, and then when total expenditure drops significantly, it illustrates that the financial sector's business period is going via compression.

So that it is the right answer.

5 0
2 years ago
A company's direction, objectives, and strategy Group of answer choices are set in stone as the end of the planning process. nev
STALIN [3.7K]

Answer:

are never final, as managing strategy is an on-going, dynamic process.

Explanation:

In Business management, a strategy can be defined as a set of guiding principles, actions and decisions that an organization combines so as to achieve its business goals, attract customers and possess a competitive advantage over its rivals in the industry.

Business strategy sets the overall direction for the business because it focuses on defining how a business would achieve its goals, objectives, and mission; as well as the funds and material resources required to implement or execute the business plan. The components of a business strategy includes the following;

I. Value.

II. Vision.

III. Mission.

Hence, a company's direction, objectives, and strategy are never final because managing strategy is a continuum or an on-going, dynamic process. Thus, it's never a now and then task.

6 0
3 years ago
Given the annual rate of economic growth, the "rule of 70" allows one toA) determine the accompanying rate of inflation.B) calcu
erik [133]

Answer:

B) calculate the number of years required for real GDP to double

Explanation:

The rule of 70 calculates the amount of time it takes for an investment to double.

Given the annual rate of economic growth, the rule of 70 calculates the number of years required for real GDP to double.

It is calculated as 70 / annual rate of economic growth.

I hope my answer helps you.

7 0
3 years ago
in Illinois Mobile homes are generally considered to wich one a. personal property b. real property c.trade fixture d. fixtures
valina [46]

A. personal property


6 0
3 years ago
Parents can reduce their taxes by:
shusha [124]

Parents can reduce their taxes by using a child care tax credit. The government gives parents tax credit for each child that they have. Unlike tax deduction and exemption, tax credit can be able to reduce more in the parents’ tax bill. Tax deduction just tries to lower the taxable income and not a reduction in other areas. 

8 0
3 years ago
Read 2 more answers
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