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Alika [10]
3 years ago
12

Company Company A Company B Forecasted return 7% 11% Standard deviation of returns 8% 23% Beta 1 3 The market risk premium is 6%

and the risk-free rate is 3%. Using Capital Asset Pricing Model (CAPM), will you invest in the companies
Business
1 answer:
Olin [163]3 years ago
3 0

Answer and Explanation:

The computation is shown below:

As we know that

Required rate of return = Risk Free Rate +  Beta × (Market Return -Risk Free Rate)

For company A

= 3% + 1 × 6%

= 9%

For Company B

= 3% + 3  ×  6%

= 21%

As we can see that the forecast return should be lower than the required return so we should not invest in company A also the same is done in company B too

Therefore we dont invest in any of the company

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BaLLatris [955]

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3 0
1 year ago
Justify the establishment of a state owned compony
SSSSS [86.1K]
The establishment of a state -owned Company is really important for every nations, especially if it involved in the resources that is critically needed for the people.
For example, lets say that all of the water resources fall to the hands of capitalist. Imagine how expensive it could be to get a simple drinking water or for baths.i hop that helps
6 0
3 years ago
1. Which of the following questions would be permissible to ask during an interview with a candidate who
Marina CMI [18]

Answer:

I would say the first one

Explanation:

beacuse you do need to know if there is anything that could be hard for them to do and make it where they cant do there job it also might depnd on the job of what you would ask them but I would say the fist one so it gets to the point and isent rude hope this helps :)

7 0
3 years ago
Read 2 more answers
Which of the following people is functioning as a producer?
Natalija [7]

Answer:

D. Simon, who is baking a cake that will be sold in a bakery

Explanation:

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3 0
3 years ago
A company purchases and uses 40000 gallons of materials for which they paid $3 a gallon. The materials price variance was $90000
iogann1982 [59]

Answer:

the standard price per gallon is $5.25

Explanation:

the computation of the standard price per gallon is given below;

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Hence, the standard price per gallon is $5.25

The same should be considered

4 0
3 years ago
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