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aleksandr82 [10.1K]
3 years ago
9

The stock price of company x doubled over the past year, the stock price of company z decreased by over 50%. if the market is ef

ficient, if the stocks have the same beta, and if you do a little research:
a. will you be able to identify which stock is most likely to have the higher actual investment return next year? why or why not?
b. will you be able to identify the economic factors that contributed to last year's stock returns? (i.e., why did company x double, and why did company z decrease by 50%?) why or why not?
Business
1 answer:
umka21 [38]3 years ago
5 0
Im not sure but I need the points man
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How much do alcohol related crashes cost Florida every year
maksim [4K]

Explanation:

Total more than $44 million

hope it is helpful to you

8 0
3 years ago
Read 2 more answers
The risk-free rate is 5.4 percent and the market risk premium is 5 percent. Assume that required returns are based on the CAPM.
Karo-lina-s [1.5K]

Answer:

11.419%

Explanation:

Given that,

Risk-free rate = 5.4

Market risk premium = 5

Portfolio = $1 million = $1,000,000

Amount invested in stock A = $218,000

Beta A = 0.5

Amount invested in stock B = $1,000,000 - $218,000

                                              = $782,000

Remainder invested in stock B that has a beta = 1.4

Portfolio beta:

= [(Amount in A × Beta of A) + (Amount in B × Beta of B)] ÷ Total Amount

= [($218,000 × 0.5) + ($782,000 × 1.4)] ÷ $1,000,000

= ($109,000 + $1,094,800) ÷ $1,000,000

= 1.2038

Required return:

= Risk free rate + (Beta × Market risk premium)

= 5.4% + (1.2038 × 5%)

= 5.4% + 6.019%

= 11.419%

Therefore, the required return on this portfolio is 11.419%

8 0
3 years ago
Ana is trying to finish an account analysis for a client, but she's missing data. She e-mails Claire in database administration
Mademuasel [1]

Answer:

This is an example of information communication

Explanation:

Is an extensional term for information technology, that stress the role of unified communications.

3 0
2 years ago
gomez runs a small pottery firm. he hires one helper at $11,000 per year, pays annual rent of $6,000 for his shop, and spends $2
7nadin3 [17]

For a poetry farm, the capital gain is $70,000 while the economic profit is $6,000.

<h3>Why does accounting profit exist?</h3>

The owner's profit, or company profit, is what is meant by accounting profit. This profit may be obtained by totaling all business income and deducting specified costs from the total. The explicit cost in this context refers to expenses spent in the course of operating the firm, such as rent paid, labor costs paid, materials acquired, etc.

<h3>Briefing:</h3>

Accounting costs = Helper cost + Annual rent + materials = $(11,000 + 6,000 + 22,000) = $39,000

Accounting profit = Revenue - Accounting cost = $(70,000 - 39,000) = $31,000

Implicit costs = Interest from savings foregone + earning from alternative job + entrepreneurial talent

= $(4,500 + 17,000 + 3,500) = $25,000

Economic profit = Accounting profit - Implicit costs = $(31,000 - 25,000) = $6,000

To know more about profit visit:

brainly.com/question/15036999

#SPJ4

7 0
1 year ago
You are considering investing in a project with the following possible outcomes: Probability of Investment States Occurrence Ret
frutty [35]

Answer:

SD = 0.0740270 or 7.40270 percent rounded off to 7.403 percent

Explanation:

To calculate the standard deviation of the investment, we must first calculate the expected or mean return of the investment. The expected or mean return can be calculated as follows,

r = pA * rA  +  pB * rB  +  ...  +  pN * rN

Where,

  • pA, pB, ... represents the probability of state occurrence
  • rA, rB, ... represents return A, return B and so on  under each state

r = 0.2 * 0.16  +  0.4 * 0.12  +  0.2 * 0.05  +  0.2 * -0.05

r = 0.08 or 8%

The formula to calculate the standard deviation of a stock/investment is as follows,

SD = √pA * (rA - r)²  +  pB * (rB - r)²  +  ...  +  pN * (rN - r)²

SD = √0.2 * (0.16 - 0.08)²  +  0.4 * (0.12 - 0.08)²  +  0.2 * (0.05 - 0.08)²  +  0.2 * (-0.05 - 0.08)²

SD = 0.0740270 or 7.40270 percent rounded off to 7.403 percent

4 0
3 years ago
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