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const2013 [10]
2 years ago
7

Consider the following two stocks, A and B. Stock A has an expected return of 10% and a beta of 1.20. Stock B has an expected re

turn of 14% and a beta of 1.80. The expected market rate of return is 9% and the risk-free rate is 5%. Which security would be considered a good buy?
Business
1 answer:
mina [271]2 years ago
7 0

Answer: Stock B

Explanation:

Use CAPM to calculate the required returns of both stocks.

Stock A

Required return = Risk free rate + beta * ( Market return - risk free rate)

= 5% + 1.20 * (9% - 5%)

= 9.8%

Stock B

Required return = 5% + 1.8 * (9% - 5%)

= 12.2%

Both of them have Expected returns that are higher than their Required returns so both of them are good buys.

The better buy would be the one that has more expected value excess over required return.

Stock A excess = 10% - 9.8% = 0.2%

Stock B excess = 14% - 12.2% = 1.8%

<em>Stock B offers a higher excess and is the better buy. </em>

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4vir4ik [10]

Answer:

The COGS for the June 1st sale is $17 per unit, and the COGS for the August 27th sale is $20 per unit.

Explanation:

<u>Date</u>       <u>Number of units</u>     <u>Unit balance</u>      <u>Unit cost</u>      <u>Average cost</u>

May 7                40                      40                      $17                $17

June 1               (20)                     20                                           $17

July 28              30                      50                     $22               $20

August 27        (30)                     20                                           $20

The average COGS after the purchase on July 28 = [(20 x $17) + (30 x $22)] / 50 = ($340 + $660) / 50 = $20

           

6 0
3 years ago
Select all that apply budget reports are commonly prepared for:_____.
steposvetlana [31]

Budget reports are generally prepared for a quarter.

Given an incomplete sentence related to the timings of budget reports.

We are required to fill the timing or frequencies given in the options so that the sentence gives an appropriate meaning.

A budgeting report is basically a report managers use that lists the previously estimated budget projections over a certain period.Budget reports are basically the financial goals leadership comes up with based on informed financial projections. Since they are  typically estimations, these budget reports almost always differ from the final financial results, sometimes drastically. Quarter is basically a collection of three months.

Hence it can be concluded that budget reports are generally prepared for a quarter.

Learn more about budget  at brainly.com/question/13964173

#SPJ4

7 0
1 year ago
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Aleonysh [2.5K]

Answer:

c option

Explanation:

8 0
3 years ago
?a(n) ________ is a manifestation of assent by the offeree to the terms of the offer in a manner invited or required by the offe
Vesna [10]
The correct answer would be acceptance. It is a manifestation of assent by the offeree to the terms of the offer in a manner invited or required by the offer as measured by the objective theory of contracts. It happens when the offeree and offeror are in mutual understanding between the terms in a contract.
8 0
3 years ago
Which of the following statements is true of a linear cost​ function? A. It presents total cost as an intercept. B. It presents
mixer [17]

Answer:

Option B It presents variable cost as a slope coefficient

Explanation:

The reason is that the total cost function is:

Y = a + bx

The total cost in this case is Y, a is fixed cost as an intercept, b is variable cost represented as an slope and coefficient and x is level of activity which is independent of Y.

So the right answer is option B.

8 0
3 years ago
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