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Bess [88]
3 years ago
11

Your opinion is that CSCO has an expected rate of return of 0.15. It has a beta of 1.3. The risk-free rate is 0.04 and the marke

t expected rate of return is 0.115. According to the Capital Asset Pricing Model, this security is
Business
1 answer:
Sav [38]3 years ago
8 0

Answer:

Overpriced

Explanation:

The computation is shown below;

As we know that

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

= 0.04 + 1.3 × (0.115 - 0.04)

= 0.1375

As the return of the security is 0.1375  i.e.  more than the expected rate of return i.e. 0.115

Hence, it is overpriced

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1 year ago
Answer this question based on the following information about a company: Revenues, $20 million; costs, $15 million; assets, $30
andrezito [222]

Answer:

$60,000,000

Explanation:

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3 years ago
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Nataly_w [17]
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