1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
olganol [36]
2 years ago
6

You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 10 percent, -10 percent, 17 per

cent, 22 percent, and 10 percent. Suppose the average inflation rate over this period was 1.5 percent and the average T-bill rate over the period was 3 percent.
a. What was the average real return on Crash-n-Burn's stock?
b. What was the average nominal risk premium on Crash-n-Burn's stock?
Business
1 answer:
defon2 years ago
6 0

Answer:

Crash-n-Burn Computers

a. The average real return on Crash-n-Burn's stock is:

= 8.3%

b. The average nominal risk premium on Crash-n-Burn's stock is:

= 6.8%

Explanation:

a) Data and Calculations:

Average inflation rate = 1.5%

Average T-bill rate = 3%

Returns on stock:

Year 1 = 10%

Year 2 = -10%

Year 3 = 17%

Year 4 = 22%

Year 5 = 10%

Total returns  = 49%

Average returns = Total returns/number of years

= 9.8% (49%/5)

Average real returns

= Average returns on the stock minus the inflation rate

= 8.3% (9.8% - 1.5%)

Average nominal risk premium = return on the stock minus the return on the T-bill

= 9.8% - 3%

= 6.8%

You might be interested in
Failure by a promissory notes maker to pay the amount due at maturity is known as_________.
Andreas93 [3]

Failure by a promissory notes maker to pay the amount due at maturity is known as Dishonoring a note.

A dishonored note is a that  promissory note which has not been paid by a debtor in a given  reasonable amount of time.  It causes the creditor to write off the recorded revenue as a  bad debt.

With the help of promissory note, a buyer  can make a short-term commitment to pay any supplier for merchandise within the stated time period and  also at a certain interest rate.

In order to properly record a dishonored note in the financial journal of the organization one must first decide whether he is  expecting to  collect payment eventually or not.

A bill is  always considered as dishonored either by non-acceptance or by non-payment of the bill.

To know more about dishonored note here:

brainly.com/question/9220878

#SPJ4

5 0
1 year ago
The beta of a security is calculated as: (_____ of a security’s return with the return on the market portfolio / _______).
spayn [35]

Answer:

Beta of a security is the covariance of the security return with the return on the market portfolio divided by variance of the market return.

The correct answer is C

Explanation:

Beta of a security is calculated as covariance (Ri,Rm) divided by Variance of the market return. Beta is used for measuring the systematic risk of a security.

5 0
3 years ago
Delta Construction Corporation, a general contractor, hires Eagle Electrical Company, a subcontractor, to wire a new office buil
nignag [31]

Answer: excused by Delta's failure to pay.

Explanation:

Delta Construction Corporation hires Eagle Electrical Company, as a subcontractor, to wire its new office building. After the completion of the work, Eagles is owed more than $50000.

Eagle's suspension of work is most likely due to the excuse by Delta's failure to pay. Delta has a right to pay up the money owed to Eagle. Lack of payment can lead to court cases.

3 0
3 years ago
So I want to say that I want to be a police or an FBI but also want to be a business woman what do I do or what do I need to kno
tangare [24]
If u are good at communicating and u are good at making decisions be a businesswomen. if ur good in history and u do a sport and can be alert be a police officer. follow ur gut don’t feel pressured and than regret taking it. remember people still don’t know their major in college so don’t rush.
6 0
3 years ago
Inappropriate practices and activities related to consistency of care include:
Ira Lisetskai [31]

Inappropriate practices and activities related to consistency of care include changing caregivers often do infants get comfortable being with different adults .

<u>Explanation: </u>

Consistency of care means a small variability in the care industry from shift to shift from day to day, to the nursing assistant, to the resident, to the caregiver and to the patient to the patient.

Continuity of care ensures that each caregiver transition is managed seamlessly to notify the next shift of what was being learned and what needs attention. Medical records are not enough: handwriting is usually poor, time consuming communication, and nurses experience and explain in various ways the same patient risk factors.

Across one side, different eye pairs on such a patient are useful, with a range of symptoms and signs and theories established. And on the other hand, the eyes must still maintain the clear identification of important issues and indicators.

6 0
3 years ago
Other questions:
  • Your small remodeling business has two work vehicles. One is a small passenger car used for job site visits and for other genera
    15·1 answer
  • Managers use a predetermined overhead rate for which of the following reasons?
    6·1 answer
  • Why do you think brand advocates willingly promote companies via social media?​
    10·1 answer
  • Magical Productions is a large production company that controls a major portion of the television industry's market share along
    7·1 answer
  • Identify the accounting concept that describes each situation below. Do not use any concept more than once. (a) Is the rationale
    13·1 answer
  • What are the three main parts to a slide presentations structure? A) thesis statement, supporting evidence, and concluding quote
    5·1 answer
  • You manage a popular nightclub, and lately revenues have been disappointing Your bouncer suggests that raising drink prices will
    13·1 answer
  • 1. After multiple rounds of layoffs, a plastics processing plant goes into bankruptcy because it has failed to keep up with tech
    8·1 answer
  • The following represents the probability distribution for the daily demand of microcomputers at a local store. Demand Probabilit
    8·1 answer
  • lisa lives next to a vacant plot that belongs to carol. carol has never visited the plot in the last 20 years during which perio
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!