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tatuchka [14]
3 years ago
7

Desreumaux Inc's stock has an expected return of 12.25%, a beta of 1.25, and is in equilibrium. If the risk-free rate is 5.00%,

what is the market risk premium?
Mathematics
1 answer:
zhenek [66]3 years ago
5 0

Answer:

MRP=\frac{12.25\% -5.00\%}{1.25}=5.8 \%

Step-by-step explanation:

Previous concepts

The Capital Asset Pricing Model (CAPM) is a concept that "analyze the relationship between risk  of any type and the definition of expected return  about the assets".

By definition the Market risk premium is defined as "the difference between the average return and the return on a risk-free".

The value of  \beta represent an adimensional number that allows to measure if we create more/low risk on any investment.  

Solution to the problem

Assuming that we can use the capital asset pricing model we can calculate the market risk premium (MRP) with the following formula:

MRP= \frac{ER -RFR}{\beta}

Where:

ER= Expected return = 12.25 %

RFR= Risk free rate= 5.00%

\beta = 1.25

So then if we replace we got:

MRP= \frac{12.25\% -5.00\%}{1.25}=5.8 \%

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Lina20 [59]

Answer:

4, -1

Step-by-step explanation:

We can reverse the FOIL (First, outside, inside, last) method to break down the equation. The question is asking to solve by factoring so you want to find the right combination of numbers this equation can be broken down into:

x^2 - 3x - 4 = 0

Because we want x squared, x needs to be multiplied by itself, so we can put x in the first slot for each.

(x + or - ?) ( x + or - ?) = 0

Then we need to find numbers that could be added to get -3 and multiplied to get -4. The only set of numbers that works for this is -4 and 1. Note that the sign you put in front of each number has an impact on your answers. With this we get:

(x - 4) (x + 1) = 0

To test that this is equal to the original equation, simply multiply it out using FOIL.

x * x = x^2

x * 1 = x

x * -4 = -4x

-4 * 1 = -4

Putting each component into an equation:

x^2 + x - 4x - 4 = 0

Simplifying:

x^2 - 3x - 4 = 0

Once we are sure it is still the same equation, we find the solutions. We know 0 multiplied by anything equals 0, so to get 0 as the answer, one of the sets in the parentheses must equal 0. (It doesn't matter what the other one is as long is one equals 0)

Therefore, we have 2 solutions, 4, and -1 because if x is 4, 4-4 is 0 which solves the equation, and if x is -1, then -1 + 1 is 0 which also solves the equation.

You can also check your answers by plugging them back into the original equation.

5 0
3 years ago
if everything in a store is 20% off and the discounted price of an item is $18.00 what is the regular price?
EastWind [94]

Answer:

14.4 dollars

Step-by-step explanation:

If you buy an item at $18 dollars with a 20% discount, you will pay 18 - 3.6 = 14.4 dollars

8 0
3 years ago
Airline fares for a flight from Dallas to Austin are $30 for first class and $25 for tourist class. If a flight had 52 passenger
posledela

There were 40 tourist class passengers and 12 first class passengers.  

Explanation:

Let the number of passengers who booked for tourist class be

=

x

Then, number of passengers who booked for first class

=

52

−

x

According to question,

Total money paid = $25(tourist class)+$30(first class)  

$

1360

=

$

25

(

x

)

+

$

30

(

52

−

x

)

1360

=

25

x

+

1560

−

30

x

1360

−

1560

=

25

x

−

30

x

−

200

=

−

5

x

x

=

−

200

−

5

x

=

40

So, there were 40 tourist class passengers.

Now first class passengers

=

52

−

x

=

52

−

40

=

12

∴

There were 40 tourist class passengers and 12 first class passengers.  

As a check

Total money paid = $25(tourist class)+$30(first class)  

R

H

S

=

$

25

(

40

)

+

$

30

(

12

)

$

1000

+

$

360

=

$

1360

L

H

S

=

$

1360

Hence verified.

8 0
3 years ago
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True [87]

Answer:

ASA theorem (angle side angle)

Step-by-step explanation:

ac is congruent to ac bc of reflexive property.

and bc you found the other two angles using alternate interior angle theorem, it's safe to use angle side angle. if two angles and a side is congruent between the two triangles, then the two sides are congruent.

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