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frozen [14]
2 years ago
13

The market risk premium is 9.0%, and the risk-free rate is 5.0%. If the expected return on a bond is 9.5%, what is its beta?

Business
1 answer:
leva [86]2 years ago
4 0

Answer:

The beta is 1

Explanation:

The computation of beta using the CAPM model is shown below:

As we know that

Expected rate of return = Risk free rate of return + Beta × Market risk premium

9.5% = 5% + Beta × 9.0%

9.5% - 5% = Beta × 9.0%

9.0% = Beta × 9.0%

So, the beta is 1

We simply applied the above formula so that the correct value could come

And, the same is to be considered  

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Suppose General Electric paid its line workers $12 per hour in 2015 when the Consumer Price Index was 100. Suppose that deflatio
Elena-2011 [213]

Answer:

(a) N = 10.08

(b) N = 10.89

(c) 19.05

Explanation:

(a)

Real\ wage=\frac{Nominal\ wage}{CPI\ in\ the\ given\ year}\times CPI\ in\ the\ base\ year

12=\frac{N}{84}\times 100

N = 10.08

(b)

Real\ wage=\frac{Nominal\ wage}{CPI\ in\ the\ given\ year}\times CPI\ in\ the\ base\ year

12\times1.08=\frac{N}{84}\times 100

N = 10.89

One thing to observe here is that percentage increase in the real wage is always equal to the percentage increase in nominal wage. Same can be verified with different values.

(c) It's given that the real wage is kept at $ 12 which was the same in the last year as well.

So % increase would be zero.

However, if that $ 12 is considered as a Nominal wage in the current year,then,

Percentage increase=\frac{12-10.08}{10.08}\times100

=\frac{192}{10.08}

= 19.05

7 0
3 years ago
The production function gets flatter, while the total cost curve gets steeper due to the fact that Group of answer choices at lo
Minchanka [31]

The production function gets flatter, while the total cost curve gets steeper due to the fact that C. <u>at higher levels of</u><em><u> production firms </u></em><u>require less inputs to increase production by the same amount as compared to lower levels of </u><u>production.</u>

The <em>production function</em> shows the relationship that exists between the inputs and the outputs during the production of a product.

It should be noted that <u>diminishing marginal product</u> is vital for explaining why the increase in the output of a firm results in the <em>production function</em> getting flatter. Also, the <em>total curve</em> becomes steeper.

Therefore, at higher levels of production, firms require fewer inputs to increase<em> production</em> by the same amount.

Read related link on:

brainly.com/question/25162387

8 0
2 years ago
Remember that Molly has a $2500 down payment saved for this purchase. The dealer will take the $500 Cash Allowance straight off
Ksivusya [100]

Answer: $3000

Explanation:

Based on the information given, the amount of loan that Milly needs will be the addition of the down payment and the cash allowance and this will be:

= Down payment + Cash allowance

= $2500 + $500

= $3000

Molly needs a loan of $3000

4 0
2 years ago
Read 2 more answers
Jessica spends all her income on two goods, A and B. The price of A is $5, and the price of B is $7. At the current consumption
masha68 [24]

Answer:

Jessica should consume more of good A.

Explanation:

Jessica spends all her income on two goods, A and B.

The price of A is $5, and the price of B is $7.

At the current consumption bundle, the marginal utility of A is 10, and the marginal utility of B is 21.

The total utility is maximized when the ratio of marginal utility and price of the goods consumed is equal for all the goods in the bundle.

The ratio for Good A

= \frac{10}{5}

= 2

The ratio for good B

= \frac{21}{7}

= 3

Since the ratio is higher for good B, the consumer should shift from consumption of good B to good A until the ratio is equal for both the goods.

5 0
3 years ago
I hope I can see my channel grow supporting me would be awesome I want a career in this so please all help is wanted
timama [110]

Answer:

I hope you grow and become successful you deserve it and congratulations on that much subscribers

8 0
2 years ago
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