Answer: A;B
Explanation:
<em>Consider the single factor APT. Portfolio A has a beta of 1.7 and an expected return of 19%. Portfolio B has a beta of .6 and an expected return of 15%. The risk-free rate of return is 11%. If you wanted to take advantage of an arbitrage opportunity, you should take a short position in portfolio </em><em><u>A</u></em><em> and a long position in portfolio </em><em><u>B.</u></em>
You should take a short position in the Portfolio with a lower risk premium and a long position on the Portfolio with a higher risk premium.
Using the single factor APT, the formula for risk premium can be derived from;
E(r) = Rf + beta (Risk premium on factor)
<u>Portfolio A</u>
19% = 11% + 1.7 * Risk premium
1.7 * risk premium = 8%
Risk Premium = 4.7%
<u>Portfolio B</u>
15% = 11% + 0.6 * RP
0.6 * RP = 4%
RP = 6.67%
Portfolio A Risk premium is lower so it should be <u>shorted.</u>
Portfolio B Risk premium is higher so it should taken a <u>long position</u> in.
Out of the 485 who ate the same food items, 65 people had fever and diarrhea and five of them were severely affected. If there were 72 cases added based on the laboratory tests, clinically apparent cases will be (65+72) or 137. The ratio of severe cases to other clinically apparent cases was 5/137.
Answer:
Deferred tax liability = $26,000,000
Explanation:
The deferred tax liability is calculated at the tax rate of 40% on the future taxable income:
Deferred tax liability = $104,000,000*25%
Deferred tax liability = $26,000,000
Thus, $260,00,000 is the deferred tax asset or liability amount to be reported in the balance sheet as current or long term.
Answer:
The WACC will be 10% for average risk
below when the risk is low
and above 10% when the risk is higher than average
as the cost of capital (required return from the stockholders) will increase pushing the WACC higher
Explanation:
As the WACC is composed by the cost of debt and the cost of equity a higher risk will require a better return for the investor thus, the equity proportion that determinates the WACC will change along the project risk.
Answer:
Try to focus on lean and low-fat sources. Some good examples are turkey, chicken, 93 percent lean red meats, egg whites, tuna, top sirloin steak, tilapia, salmon, mackerel and shrimp. Carbohydrates give you energy, so you'll need to eat foods rich in them to fuel all your workouts.
Explanation: