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Lunna [17]
3 years ago
5

A stock has an expected return of 12.2 percent, the risk-free rate is 6 percent, and the market risk premium is 10 percent. What

must the beta of this stock be? (Do not round intermediate calculations and round your a
Business
1 answer:
matrenka [14]3 years ago
3 0

Answer:

Beta  = 0.62

Explanation:

<em>The capital pricing model establishes the relationship between expected return from a stock and its systematic  risk . The systematic risk is that which affects all players (businesses and firms) in the entire market, such risks are occassioned by changes in interest rate, exchange rate e.t.c</em>

<em>According to the model , the expected return is computed as follows</em>

E(r)   = Rf  + β(Rm-Rf)

Rf- risk -free rate, Rm-Rf - market premium

  E(r)     = 12.2%,  Rm-Rf  = 10,  β- ?

12.2 = 6%  + β× 10

10β = 12.2 -6

β=  (12.2-6)/10

     = 0.62

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Answer:

Aldo Leopold

Explanation:

Aldo Leopold (1887 - 1948) was a founder of wildlife management. He taught at the University of Wisconsin and is famous for his book <u>A Sand County Almanac</u>, 1949, which sold over 2 million copies.

His work focused on the development of environmental ethics and wilderness conservation.

4 0
3 years ago
The common stock of the P.U.T.T. Corporation has been trading in a narrow price range for the past month, and you are convinced
mariarad [96]

Answer:

A) according to put call parity:

price of put option = call option - stock price + [future value / (1 + risk free rate)ⁿ]

put = $8.89 - $120 + [$120 / (1 + 8%)¹/⁴] = $8.89 - $120 +$117.71 = $6.60

B) you have to purchase both a put and call option ⇒ straddle

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3 0
3 years ago
Property A is a self storage facility with a going cap rate of 6.0%. Property B is an office building with a going cap rate of 6
hjlf

Answer:

Worth of both the property will be same.

Explanation:

Data provided in the question:

Cap rate for the Property A which is a self storage capacity = 6%

Cap rate for the Property B which is an office building = 6%

NOI of both the buildings are equal

Now,

Mathematically,

Cap rate is given as = [ NOI ] ÷ [ Worth of the property ]

or

Worth of the property =  [ NOI ] ÷ [ Cap rate ]

Since, the NOI and cap rate for both the buildings are same

Therefore,

Worth of both the property will be same.

3 0
3 years ago
Items of value owned by a business are known as which of the following?
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Answer:

Explanation:

Assets

6 0
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S&amp;L Computer services has separate divisions to focus on the needs of individual consumers, small businesses, and large busi
prisoha [69]

Answer:

Letter c is correct. <u>Customer.</u>

Explanation:

Departmentalization by customer is a type<u> of grouping that divides organizational activities so that they are effective in meeting and directing organizational strategies to a type of audience that has similar characteristics</u>, such as age, gender, preferences, and income. Each unit has customized characteristics and sales method so that the customer group has a positive perception about the organization and its requirements and needs are properly met.

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3 years ago
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