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worty [1.4K]
3 years ago
12

Oriole, Inc., stock has a beta of 1.60. If the expected market return is 17.5 percent and the risk-free rate is 7.0 percent, wha

t does CAPM indicate the appropriate expected return for Oriole stock is
Business
1 answer:
Katen [24]3 years ago
7 0

Answer:

23.8

Explanation:

Oriole stock have a beta of 1.60

The expected market return is 17.5

The risk free rate is 7.0

Therefore the expected return for oriole stock can be calculated as follows

= 7 + 1.60(17.5-7)

= 7+ 1.60(10.5)

= 7 + 16.8

= 23.8

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All of the following statements regarding Government National Mortgage Association (GNMA) pass-through securities are true EXCEP
trasher [3.6K]

Answer:

B) GNMAs are considered to be the riskiest of the agency issues

Explanation:

The Ginnie Mae or GNMA pass through securities are mortgage backed. The Great recession taught us that mortgage backed securities are not always 100% secure, but they are still considered secure investments basically because they are guaranteed by the US government. They are similar to the securities sold by the US Treasury.

Ginnie Mae basically guarantees mortgages using federal funds (from Federal Housing Administration and Department of Veterans Affairs).

3 0
3 years ago
A The management of Gresa Inc. is reevaluating the appropriateness of using its present inventory cost flow method, which is ave
Zepler [3.9K]

Answer:

Gresa Inc.

Comparative Condensed Income Statements for 2017

under FIFO and LIFO.

                                                                  <u>  FIFO                               LIFO</u>

Sales                                                          1176450                    1176450

Cost Of Goods Sold                                 660,400                    657, 200

Gross Profit                                               516050                    539,500

Operating  Expense                                  $ 150,000               $ 150,000

Income before Tax                                      $ 366,050             $ 389500

Income Tax  (30%)                                       <u> $ 109815                  $ 116850</u>

<u>Net Income                                                     $  256235  $272650</u>

<em><u>Working :</u></em>

<em><u>Fifo Cost of Goods Sold= $ 10,000 +  $168,000 +  $ 150,000+ 156,000 + 176,400= </u></em>

<em><u>Lifo Cost of Goods Sold= $ 224,000 + 156,000+  $ 150,000+127,200</u></em>

Purchases were made quarterly as follows.

Quarter     Units         Unit Cost        Total Cost

1               70,000       $2.40             $168,000

2             60,000        2.50               150,000

3             60,000         2.60              156,000

4             80,000          2.80               224,000

                270,000                            $698,000

Inventories    Beginning (5,000 units)    $10,000          

Total net sales (253,000 units)  $1,176,450

Ending (22,000 units)

Total cost of goods purchased (270,000 units) 698,000

3 0
3 years ago
If a company does not intend to expand globally, but exports some products without customizing for international markets, it sho
ra1l [238]

Answer:

yes

Explanation:

5 0
3 years ago
Suppose that General Motors Acceptance Corporation issued a bond with 10 years until maturity, a face value of $1000, and a coup
lisabon 2012 [21]

Answer:

Ans. The price of the bond immediately after it makes its first coupon payment is $1,068.02

Explanation:

Hi, we have to bring to present value the remaining cash flows, that is 9 coupons and its face value, so we need to use the following equation.

Price=\frac{Coupon((1+YTM)^{n}-1) }{YTM(1+YTM)^{n} } +\frac{FaceValue}{(1+YTM)^{n} }

Where:

Coupon = 0.07*$1,000=$70

YTM = Yield to maturity, in our case 6% or 0.06

n = 9 (since the bond is paying every year and there are 9 years left until maturity)

Face Value= $1,000.

Everything should look like this

Price=\frac{70((1+0.06)^{9}-1) }{0.06(1+0.06)^{9} } +\frac{1,000}{(1+0.06)^{9} }

Therefore:

Price=476.12+591.90=1,068.02

So, the price of this bond right after paying its first coupon is $1,068.02

Best of luck.

8 0
3 years ago
What do you think of when you hear the word geography?
professor190 [17]
physical properties of Earth's surface and the human societies spread across it.
6 0
3 years ago
Read 2 more answers
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