Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Accounting Basics Expert

1. Suppose that both X and Y are well-diversified portfolios and risk-free rate is 8%.  Portfolio X has expected return of 14% and beta of 1.00. Portfolio Y has the expected return of 9.5% and beta of 0.25.  In this situation, you would conclude that portfolios X and Y __________.

A) Are in equilibrium

B) Offer an arbitrage opportunity

C) Are both underpriced

D) Are both fairly priced

2. What is expected return on stock with beta of 0.8, given risk free rate of 3.5% and expected market return of 15.6%?

A) 3.8%

B) 13.2%

C) 15.6%

D) 19.1%

3. If only data available is that beta of a stock is 1.4, determine probable return on investment in this stock if market falls 5%?

A) -6%

B) -5%

C) +5%

D) +6%

4. Risk premium for exposure to aluminium commodity prices is 4% and firm has a beta relative to aluminium commodity prices of 0.6. Risk premium for exposure to GDP changes is 6% and firm has beta relative to GDP of 1.2. If risk free rate is 4.0%, computed the expected return on this stock?

A) 10.0%

B) 11.5%

C) 13.6%

D) 14.0%

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M917091

Have any Question? 


Related Questions in Accounting Basics

1 the prices of financial assets are based on the expected

1. The prices of financial assets are based on the expected value of future cash flows, discount rate, and past dividends. A. True B. False 2. By using different discount rates, the market allocates capital to companies ...

Expl principles of accountingdepartment Expl Principles of Accounting Department

Expl Principles of Accounting Department Responsibility • Why should responsibility for related transactions be divided among different departments or individuals? Do you agree the transactions should be divided? Why or ...

Assignmentsec 10k link Assignment SEC 10K Link:

Assignment SEC 10K Link: https://www.sec.gov/Archives/edgar/data/908255/000090825516000077/a10k12312015.htm Position: 358 Income Statement: 53 Balance Sheet: 52 Statement of Stockholders Equity: 56 Statement of Cash Flow ...

Write a 300- to 500-word response in which you address the

Write a 300- to 500-word response in which you address the following questions from Case, Charitable Contributions and Debt: A Comparison of St. Jude Children's Research Hospital/ALSAC and Universal Health Services: What ...

Waupaca company establishes a 480 petty cash fund on

Waupaca Company establishes a $480 petty cash fund on September 9. On September 30, the fund shows $211 in cash along with receipts for the following expenditures: transportation-in, $51; postage expenses, $65; and misce ...

1 what was the hospitals original profit forecast assume

1. What was the hospital's original profit forecast (assume away any issues with depreciation, taxes, etc.)? Halfway through the fiscal year, what is the hospital's revised projection for FY11 profits? 2. Which inpatient ...

Assignmentapplication break-even analysiswhen expenses and

Assignment Application: Break-Even Analysis When expenses and revenues are equal, this is known as the "break-even point" or BEP. To determine break-even, an examination of fixed and variable costs (expenses) in relation ...

1 what is the beta of a firm whose equity has an expected

1. What is the beta of a firm whose equity has an expected return of 21.30%, the risk-free rate is 7%, and the expected return on the stock market is 18%? 2. Two reasons for the agency problem in modern corporations is: ...

Principles of accountingthe accounting cyclequestion

Principles of Accounting The Accounting Cycle Question A • Explain why temporary accounts are closed each period. Question B • Identify the 10 steps in the accounting cycle.

In todays technology environment hackers present a

In today's technology environment, hackers present a substantial risk to a firm's accounting or business system. As the result of these attacks, firms suffer huge losses, ranging from financial losses to losses in confid ...

  • 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