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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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Contracts drafted under a common law framework tend to be
Fynjy0 [20]

Answer:

In detailed along with all the contingencies that are spelled out.

Explanation:

Common law is the body which is of legal rules that have been made or build through the judges as they will issue the rulings on cases, which is opposed to the rules and the laws which were made through the official statutes or the legislature.

Under the common law, the contracts are made or stated or drafted so that they will provide a brief as well as detailed rules along with all the possible contingencies which were spelled out or made out.

3 0
3 years ago
A group of newly recruited employees were bullied by senior members of the facilities team. Jodie, one the team members who witn
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Answer:

B) Upward communication

Explanation:

Upward communication defines that the employees follow hierarchy from downward to upward which means a lower employee to a higher. For example Worker to supervisor and supervisor to Manager. Upward communication is the most effective source in every organization as traditional forms of communication increasingly become less common.

Therefore as per the situation, Senior members of the facilities team had intimidated a group of newly hired workers. Jodie, one of the team members who observed the event, wrote a letter detailing the harassment incident to her division manager. In this case, Jodie is engaging in upward communication.

5 0
4 years ago
Assume there are six companies in a certain industry. Four companies have $10 sales apiece, while two companies have $5 sales ea
antoniya [11.8K]

Answer:

An industry consists of six firms with annual sales of $300, $500, $400, $700, $600, and $600, respectively. a. What is the industry's four firm concentration ratio? b. What is the industry's Herfindahl-Hirschman index? c. Is this industry highly concentrated? Explain.

Explanation:

5 0
3 years ago
The entry to record the flow of direct labor costs into production in a job order cost accounting system is to
Nookie1986 [14]

Answer:

Debit : Work In Process Account and Credit : Salaries and Wages Payable Account

Explanation:

All manufacturing costs are accounted for in a Work in Process Account during manufacture. Therefore Debit the Work In Process Account to show accumulation of the manufacturing costs and Credit the Salaries and Wages Payable Account to show the utilization of labor.

4 0
3 years ago
_____ are expense items that do not become part of a final product. select one:
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Business services are expense items that do not become part of a final product.

Business services are intangible items such as IT, finance, management, shipping and more. These services support each other but do not become part of the final product. Installations and supplies are both part of the final product. Supplies to build and installations to put together.
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3 years ago
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