Answer:
1. The riskier stock is the one with the higher beta which is Handy Ltd.
Use CAPM to calculate the required return on both stocks. The formula is:
Required return = Risk free rate + beta * (market return - risk free rate)
Gans Ltd Stock Handy Ltd Stock
= 4% + 0.9 * ( 10% - 4%) = 4% + 1.8 * (10% - 4%)
= 9.4% = 14.8%
Difference = 14.8 - 9.4
= 5.4%
2. a. Expected return
Expected return is a weighted average of the returns given the probability of the different state of economies.
= (0.25 * 18%) + (0.4 * 5%) + (0.35 * -2%)
= 0.045 + 0.02 - 0.007
= 5.8%
b. Required return
Using CAPM like in question 1:
Required return = Risk free rate + beta * (market return - risk free rate)
= 4% + 1.2 * ( 10% - 4%)
= 11.2%
c. The asset <u>should not be purchased</u> because its expected return is lower than its required return. This means that the stock is not providing enough return for the risk incurred.
Answer:
I think $33
Explanation:
it probably ain't right I guess
1. Learn Japanese or get a translator
2. Buy lots of stock in Japanese video games like Dance Dance Revolution or Nintendo products
3. Make a lot of anime tv shows
4. Make sure to tell the government what you’ll do to insure they know isn’t illegal
5. Get that fat city wok cash
<span>The scenario in which Tesla, who crafts imitation dream catchers in her spare time and because her father constantly encourages her to sell them on ebay. she finally agrees to sell them, but she notices that while she still enjoys making the dream catchers, she no longer does it for fun—she does it to make money this is an example of the over justification effect.
</span> The over justification effect<span> occurs when </span>some extrinsic reward (money for example) leads to a reduction in a person's intrinsic motivation.
<span>To encourage customers to open a mail offering them a subscription to home companion, a home furnishings magazine, the front of the envelope suggested that there was a gift inside. The envelope contained an attractively laminated bookmark. This is an example of combining direct marketing with support media.
Support media is media or items that is included to promote products or services. In this case, the laminated bookmark is an example of support media because it is being put in the envelopes to promote the product. They are grabbing their customers attention by "gifting" them with a promotional item.
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