All categories

3 years ago

Identify and briefly discuss three criticisms of beta as used in the capital asset pricing model

1 answer:

5 0

<span>The main issues concerning beta in a capital asset pricing model involve the lack of expertise that often accompanies the beta. Even with experience and standing in the industry, beta can still be wildly off-place even from the most respected of sources. Another big concern is that most beta uses an incomplete data set to assess a pricing model. Simulations are often a better way to collect accurate estimates.</span>

You might be interested in

A partnership set up for a specific purpose for a short period of time is known as a joint stock company. acting board of direc

amm1812

Answer:

joint venture

Explanation:

A joint venture is a strategic alliance where two or more parties, usually businesses, form a partnership to share markets, intellectual property, assets, knowledge, and, of course, profits. A joint venture differs from a merger in the sense that there is no transfer of ownership in the deal

Joint ventures provide a way for companies to enter foreign markets. For example, a foreign company enters into a joint venture with a U.S. company for sale of its product. The foreign company then benefits from the domestic company's governmental approval and business relationships in the industry.

4 0

3 years ago

Read 2 more answers

A bank initially has $190 million in assets and $150 million in liabilities. the banks net worth (capital) is _____________ mill

ElenaW [278]

Hi there

We know that the formula of the balance sheet is
Assets=liabilities+capital
So we want to find the amount of capital the formula is
Capital=assets-liabilities

The first answer is
Capital=190million−150million=40million...answer

The second answer
if the bank’s assets increase by 10% and its liabilities do not change
The amount of assets is
190+190×0.1=209million
And the amount of capital is
Capital=209−150=59million

capital increases by
59-40=19million. ..answer

Good luck!

8 0

3 years ago

Mountain High Ice Cream Company transferred $68,000 of accounts receivable to the Prudential Bank. The transfer was made without

Maurinko [17]

Answer:

Dr Cash $59,840

Dr Loss on Sale of Receivables $8,160

Dr Recievable from Factor $5,800

Cr Recourse liability $5,800

Cr Accounts Receivable $68,000

Explanation:

Preparation of the journal entry to record the transfer on the books of Mountain High assuming that the sale criteria are met.

Dr Cash $59,840

[(68,000 x .90) - (68,000 x .02)]

Dr Loss on Sale of Receivables $8,160

[(5,800 + 68,000) - ($59,840 + 5,800)]

Dr Recievable from Factor $5,800

Cr Recourse liability $5,800

($59,840+$8,160+5800-68,000)

Cr Accounts Receivable $68,000

(To record the transfer on the books of Mountain High)

Dr Loss on Sale of Rec = (5,800 + 68,000) - ($59,840 + 5,800) = $8,160

73,800-65650

7 0

2 years ago

On December 1, after making a concerted effort, management determines that it will be unable to collect $1,200 owed to it by one

madam [21]

Answer:

Debit Allowance for doubtful debts $1,200

Credit Accounts receivable $1,200

Being entries to write off uncollectible debt on December 1

Explanation:

When a company makes sales on account, debit accounts receivable and credit sales. Based on assessment, some or all of the receivables may be uncollectible.

To account for this, debit bad debit expense and credit allowance for doubtful debt. Should the debt become uncollectible (i.e go bad), debit allowance for doubtful debt and credit accounts receivable.

Where a debit that had previously been determined to have gone bad gets settled, debit cash and credit bad debt expense.

5 0

3 years ago

In the month of June, a department had 19900 units in beginning work in process that were 75% complete. During June, 90200 units

balandron [24]

Answer:

103,500 units

Explanation:

Equivalent units calculation - conversion costs

Completed and transferred units (99,100 x 100 %) = 99,100 units

Ending Work in Process units (11000 x 40%) = 4,400 units

Total Equivalent units = 103,500 units

therefore,

The equivalent units of production for conversion costs for June were 103,500 units

7 0

3 years ago