Answer:
The average expected rate of return on the market portfolio is 10 percent.
Explanation:
The CAPM (fixed asset pricing) model describes the relationship between systematic risk and expected return on assets, especially stocks. CAPM is widely used throughout the financial community to value high-risk securities and achieve the expected returns on assets when taking into account the risk of those assets and the cost of capital.
The formula for calculating the expected return on an asset taking into account its risk is as follows:
ERi = Rf + βi (ERm - Rf)
where:
ERi = expected return on investment
Rf = risk-free interest rate = 4 percent.
βi = beta inversion =1.0
(ERm −Rf) = market risk premium = 6 percent.
ERi = 4 + 1 ×(6) =10
The average expected rate of return on the market portfolio is 10 percent.
Any interest that you receive from a bank is taxable income, so I guess its false
Answer:
The correct statement is C. This statement is misleading because a no-load fund cannot charge more than 25 basis points of 12b-1 fees
Explanation:
THIS STATEMENT IS MISLEADING BECAUSE A NO-LOAD FUND CANNOT CHARGE MORE THAN 25 BASIS POINTS OF 12B-1 FEES.
A mutual fund is not permitted to advertise itself as a "no-load" fund if it charges 12b-1 fees of more than .25% (25 basis points) annually. 12b-1 fees are charges against net asset value that pay for the cost of soliciting new investment to the fund, and they can be used to compensate salespersons that sell the fund's shares.
Answer:
annual income = $70,292.52
Explanation:
initial outlay $900,000
in order to determine the net cash flows per year we can use the present value of an ordinary annuity:
PV = annual cash flow x annuity factor
- PV = $900,000
- annuity factor, 15%, 12 years = 6.1944
annual cash flow = $900,000 / 6.1944 = $145,292.52
annual cash flow = [(revenue - operating costs - depreciation) x (1 - tax rate)] + depreciation
- revenue - operating costs - depreciation = annual income
- tax rate = 0?
- depreciation = $900,000 / 12 = $75,000
$145,292.52 = annual income + $75,000
annual income = $145,292.52 - $75,000 = $70,292.52
Answer:
Adjusted Balance 31,671
Explanation:
<em>CASH </em>
Balance 25,497
Service Charge -11
Collection in firm behalf 7,000
NSF -805
accounting mistake -10
Adjusted Balance 31,671
<em>BANK </em>
Balance 26,808
Outstanding Check -3,269
Deposit in transit 8,132
Adjusted Balance 31,671
The goal of the reconciliation is to make up for the unknow information for each party. The bank and the firm We are goin to make jounral entries for all the infoamrition which is unknow to the firm until the bank statement is received.
