Over a lifetime, a college graduate typically earns much more than someone without a degree.
Answer: $35,717,50
Explanation:
Property basis = $100,000
Section 179 expense for current year = $25,000
1st year Depreciation rate = 14.29%
Adjusted basis = property basis - section 179 expense
Adjusted basis = $(100,000 - 25,000) = $75,000
Adjusted basis × Depreciation rate
$75,000 × 14.29%
$75,000 × 0.1429 = $10,717.50
Maximum allowable Depreciation ;
$(25,000 + 10,717.50) = $35,717.50
1. Lazy military
2. People who don't care
3. Very bad president
Answer:
The correct answer is C. established; rewarded.
Explanation:
Both Watson and Skinner researched behavior and conducted different studies regarding it.
Let's look at both perspectives:
- Classical Conditioning (Watson): it aims to establish an association between a stimulus and a response in order to produce that response and behavior in the individual.
- Operant Conditioning (Skinner): it focuses on rewards in order to develop an individual's response and behavior.
Watson argued a particular behavior is established and Skinner argued a particular behavior is rewarded.
Other things held constant, if the expected inflation rate DECREASES, and investors also become MORE risk averse, the Security Market Line would shift in<u> have a steeper slope </u>manner.
<h3>What is the Security Market Line (SML)?</h3>
The security market line (SML) is the Capital Asset Pricing Model (CAPM). It gives the market’s expected return at different levels of systematic or market risk. It is also called the ‘characteristic line’ where the x-axis represents the asset’s beta or risk, and the y-axis represents the expected return.
<u>Security Market Line Equation</u>
The Equation is as follows:
SML: E(Ri) = Rf + βi [E(RM) – Rf]
In the above security market line formula:
- E(Ri) is the expected return on the security.
- Rf is the risk-free rate and represents the y-intercept of the SML.
- βi is a non-diversifiable or systematic risk. It is the most crucial factor in SML. We will discuss this in detail in this article.
- E(RM) is expected to return on market portfolio M.
- E(RM) – Rf is known as Market Risk Premium.
<u>Characteristics of the Security Market Line (SML) are as below:</u>
- SML is a good representation of investment opportunity cost, which combines the risk-free asset and the market portfolio.
- Zero-beta security or zero-beta portfolio has an expected return on the portfolio, which is equal to the risk-free rate.
- The slope of the Security Market Line is determined by the market risk premium, which is: (E(RM) – Rf). Higher the market risk premium steeper the slope and vice-versa
- All the assets which are correctly priced are represented on SML.
- The assets above the SML are undervalued as they give a higher expected return for a given amount of risk.
- The assets below the SML are overvalued as they have lower expected returns for the same amount of risk.
Therefore, we can conclude that the correct option is A.
Learn more about Security Market Line (SML) on:
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