Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Accounting Basics Expert

1) Expected return on market portfolio is 15%.  Risk-free rate is 8%.  Expected return on SDA Corp. common stock is 16%.  Beta of SDA Corp. common stock is 1.25.  Within context of capital asset pricing model, __________.

A) SDA Corp. stock's alpha is -0.75%

B) SDA Corp. stock is fairly priced

C) SDA Corp. stock is underpriced

D) SDA Corp. stock alpha is 0.75%

2) Assume the multi-factor APT with two factors.  Risk premiums on factor 1 and factor 2 portfolios are respectively 5% and 3%. Stock A has a beta of 1.4 on factor 1, and a beta of 0.5 on factor 2.  The expected return on stock A is 14%.  If no arbitrage opportunities exist, risk-free rate of return is __________.

A) 5.0%

B) 5.5%

C) 6.0%

D) 6.5%

3) Security A has the expected rate of return of 12% and a beta of 1.10.  Market expected rate of return is 8% and the risk-free rate is 5%.  The alpha of the stock is __________.

A) -1.7%

B) 3.7%

C) 5.5%

D) 8.7%

4) The risk-free rate is 4%.  Expected market rate of return is 11%.  If you expect stock X with a beta of .8 to offer a rate of return of 12 percent, then you must __________.

A) sell short stock X as it is overpriced

B) sell short stock X as it is underpriced

C) buy stock X as it is overpriced 

D) buy stock X as it is underpriced  

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M99838

Have any Question? 


Related Questions in Accounting Basics

Account assignmentlets use this discussion to study bonds

Account Assignment Let's use this discussion to study bonds together. Assume the following information for a bond issue: ABC Company issues the bonds at a face value of $10,000.000 with a contractual (stated) interest ra ...

Question 1the accounts receivable account has total debit

Question 1 The Accounts Receivable account has total debit postings of $1,900 and credit postings of $1,100. The balance of the account is a/an A. $800 debit. B. $800 credit. C. $2,600 credit. D. $2,600 debit. Question 2 ...

Accounting questions1 if cash is 2345 in 20x2 and 3671 in

Accounting Questions 1. If Cash is $2,345 in 20X2 and $3,671 in 20X1, what is the percentage of increase or (decrease) from 20X1 to 20X2? A. 56.55%******* B. (56.55%) C. 36.12% D. (36.12%) 2. Gross profit by department a ...

Why does it matter whether social security is considered a

Why does it matter whether Social Security is considered a pension plan or an entitlement program? How does the FASAB direct that Social Security be reported? What unique issues does the federal government face in calcul ...

Assignmentyour accounting firm has been asked to recommend

Assignment Your accounting firm has been asked to recommend an online accounting system for several businesses who are looking to automate their accounting. Research five online accounting systems (including QuickBooks O ...

Tf question1under the modified accrual basis of accounting

T/F QUESTION 1 Under the modified accrual basis of accounting, there is no matching principle and no attempt to amortize costs that benefit multiple periods. 2 In fund accounting, expenditures may be classified in differ ...

Company annual report studychoose any company and make a

COMPANY ANNUAL REPORT STUDY Choose any company and make a report on financial report of company: David Jones Introduction (about 100 words) Conceptual framework (200 words) Critical analysis (200 words) Ethics (not more ...

Individual internal accountants report to managementyou are

Individual Internal Accountants Report to Management You are the internal accountant at a company that is preparing for an upcoming government contract bid. The management in your company is deciding if it is necessary f ...

Discussionpart 1 please respond the following question no

Discussion Part 1 please respond the following question no less then 350 words (original work, no plagiarism, 1 reference "learning experience and application of knowledge" please respond to the following: • Assume you h ...

Internet case-citizen-centric reportingalthough citizens

Internet Case-Citizen-Centric Reporting Although citizens should be concerned about the performance of government, in truth, few citizens typically review the financial information provided by their government. In part, ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro