American Paper Company has a beta of 1.2. The risk-free rate is 6 percent and the required return on the market is 14 percent. The required rate of return on the security is:
<h3>What Is the Security Market Line?</h3>
The security market line (SML) is a line drawn on a chart that serves as a graphical representation of the capital asset pricing model (CAPM)—which shows different levels of systematic, or market risk, of various marketable securities, plotted against the expected return of the entire market at any given time.
Its Also known as the "characteristic line," the SML is a visualization of the CAPM, where the x-axis of the chart represents risk (in terms of beta), and the y-axis of the chart represents expected return. The market risk premium of a given security is determined by where it is plotted on the chart relative to the SML
The formula for plotting the SML is:
Required return = risk-free rate of return + beta (market return - risk-free rate of return)
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Answer:
$1,610.51 (in both calculation)
Explanation:
1. Using Math formula,
We know, Future value, FV = PV × 
Given,
Present Value, PV = $1,000
Interest, i = 10% = 0.10
Number of periods, n = 5 years
Putting the values in the formula, we can get,
Future value, FV = PV ×
FV = $1,000 × 
or, FV = $1,000 × 1.61051
Therefore, FV = $1,610.51
2. Using excel formula,
See the image below:
We have to use present value as negative so that the result should be used as positive.
Answer:
When closing a direct request, you should be sure to include the times limits involved in your request.
Explanation:
In a business situation, where there is a lot of interaction in the business environment, information needs to be passed in such a way that it is clear and complete in the shortest amount of time. This means that good communication techniques are needed to ensure that the information is delivered and received in a clear and timely manner. One type of a form of communication technique is a direct request. A direct request is a type of communication where the person making the request is in direct contact with the receiver of the request. There are techniques that can be applied to ensure effective delivery of the information. These techniques are;
1. Let it be clear who you are talking to
2. Make the request clear and brief
3. Be sure to ask if there are any clarifications to the request
4. When closing the request be sure to include the time limits for which you want the request to be completed
5. Monitor the progress if the request was completed and correct where necessary
Answer:
Even if they aren’t interested in buying, selling, or borrowing from the Fed, changes in this tool may inconvenience bank managers.
Explanation:
Monetary policies are tools government uses to regulate the financial sectors as such any changes made will either favor the bank stakeholders/managers or distort the bank managers plans there by causing inconvenient
