The market price of a security is $50. Its expected rate of return is 14%. The risk-free rate is 6%, and the market risk premium is 8.5%. What will be the market price of the security if its correlation coefficient with the market portfolio doubles (and all other variables remain unchanged)

Answers

Answer 1

The market price of a security is $50. Its expected rate of return is 14%, and the market price of the security is mathematically given as

MR=27.368

What will be the market price of the security if its correlation coefficient with the market portfolio doubles?

Generally, the equation for expected rate return is mathematically given as

RR=(Rf+beta*(Rm-Rf)

Therefore

RR=(Rf+beta*(Rm-Rf)

Beta= (13-7)/8

Beta=0.75

In conclusion, the market price of a security

MR=DPs/RR

Where

Po=DPS/RR'

DPS=40*0.13

DPS=$5.23

and

RR=&+1.5*8

RR=19%

Hence

MR=$5.23/0.19

MR=27.368

Related Questions

cash flows earlier in a project's life are more valuable than Blank______ cash flows later on. Multiple select question. Higher; lower Lower; higher Higher; higher Lower; lower

Answers

Cash flows earlier in a project's life are more valuable than Higher cash flows later on Lower. Option A. This is further explained below.

What is the project?

Generally, the project is simply defined as company that is well organized to accomplish a certain goal.

In conclusion, A project's early cash flows are more valuable than its later cash flows that are higher, but later on.

Answers

Explanation:

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Bill was 150 pounds overweight but his insurance premiums significantly dropped after he lost weight by going to a local health club and sending his insurance company recored of his monthly visits with a personal trainer what kind of measures did bill take that led for his insurance premiums to drop

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The kind of measures that Bill took which made his insurance premiums to drop is a preventative measure.

What is a preventative measure?

In insurance, a preventative measure can be defined as a kind of measure that typically involves reducing the degree of risk associated with an insurance object, and mitigating (decreasing) the negative impact of potential insurance-related accidents on the insured.

In this context, we can infer and logically deduce that the kind of measures that Bill took which made his insurance premiums to drop is a preventative measure.

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Visit the web site for a different well-known company, and find the section that lists the company's values. what are the company's values? how do they relate to the products the company sells? did anything surprise you about the company's values? why or why not?

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Person can visit the website of Microsoft is the well known company to find the section that lists the company's values.

What are the core values that Microsoft has?

Innovation - People think that technology can and should be used for good, and that meaningful innovation can and will help to make the world a better place in both large and little ways.Inclusion and variety Diverse voices allow us to thrive. To inform, challenge, and push our thinking, we draw on the experiences, strengths, and perspectives of our workers and customers.CSR- people think that technology has the potential to be a great force for good, and we are working to ensure that everyone has access to the benefits and opportunities that technology provides. Artificial Intelligence- AI, we believe, can enhance your capabilities, free you up for more creative and strategic pursuits, and help you or your organization achieve more when it is created with humans at the heart

Thus, Microsoft is company that have a solid values.

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At the end of 2022, Carla Vista Co. has accounts receivable of $773,900 and an allowance for doubtful accounts of $63,000. On January 24, 2023, the company learns that its receivable from Megan Gray is not collectible, and management authorizes a write-off of $5,500. On March 4, 2023, Carla Vista Co. receives payment of $5,500 in full from Megan Gray. Prepare the journal entries to record the March 4, 2023, transaction. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

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The journal entries to record the March 4, 2023, transaction is: Debit Accounts receivable $5,500; Credit Allowance for doubtful accounts $5,500.

Journal entries

Carla Vista Co. Journal entries

March 4, 2023

Debit Accounts receivable $5,500

Credit Allowance for doubtful accounts $5,500

Debit Cash $5,500

Credit Accounts receivable $5,500

Therefore the journal entries to record the March 4, 2023, transaction is: Debit Accounts receivable $5,500; Credit Allowance for doubtful accounts $5,500.

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What is opportunity cost? ( selext the best answer)

Answers

Answer: the loss of potential gain from other alternatives when one alternative is chosen

Explanation:

A business's budget estimates yearly sales of $735,650. if the business plans to spend 38%
of sales on salaries and wages and 24% of sales for other expenses, how much should it
budget for total expenses?
o $456,103
o $279,547
o $176,556
o $529,668

Answers

The amount that it should budget for total expenses is: $456,103.

Budgeted total expense

Using this formula

Total expenses=(Yearly sales×38%)+ (Yearly sales×24%)

Let plug in the formula

Total expenses=$279,547+$176,556

Total expenses=$456,103

Therefore the correct option is A.

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Outline any other THREE qualities of a successful entrepreneur

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Answer:

Robust Work Ethic.

Deep Passion.

Creativity. ...

Motivated Self-Starters. ...

Easygoing Attitude. ...

Eager to Learn.

you can choose any three you want :)

Natasha is listening to dominick talk about his plans to build his kids a tree house. although he has been talking for some time, she hasn't been able to extract the main point. she has asked questions to clarify what he says. she still isn't sure about what he's saying, so she repeats what he said to see if she has it right. she makes sure not to judge what he's saying since she didn't understand. she decided that she would take notes the next time. which part of this description exemplifies analytical listening?

Answers

The part that has to do with analytical listening is, she has asked questions to clarify what he says.

What is analytical listening?

This is the type of listening that is done in such a way that what is being said would be properly analyzed.

This is not just about understanding what is being said. It has to do with division of questions to get to the main points.

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Explanation:

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define permanent office in one sentence

Answers

Answer:

A permanent office is also known as the long term office. It is established for the production and distribution of goods and services over a long period of time.

Explanation:

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As the number of stocks in a portfolio rises, a. neither firm-specific risks nor market risk falls. b. market risk falls; firm-specific risks do not. c. firm-specific risks fall; market risk does not. d. both firm-specific risks and market risk fall.

Answers

The correct statement is if the number of stocks in a portfolio rises then the firm-specific risks fall; market risk does not. .

What happened if number of stock would be increased in the portfolio?

If the number of the stocks increases in the portfolio, then the total overall return from the portfolio will decreased.

it usually happens because some stock in the stock market generally outperforms the other stock. On the other hand, most of the stocks provides an average return on them.

The risk in the portfolio can be reduced by adopting the diversification in the portfolio.

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According to Forrester's Social Technographics Model a ______ score measures how common it is for a target segment to share product and service experiences, such as sharing what songs they're listening to on Spotify or comparing their workouts to that of other Fitbit users.

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According to Forrester's Social Technographics Model a Use score measures how common it is for a target segment to share product and service experiences.

What is Forrester Social Technographics Model?

This is the model that was developed by this person which focuses on social behaviors.

The model is one that helps commercial business peiople to target the behaviors of their audiences for the sake of building customers relationships.

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Scott is a 15-year-old student who works at a part-time job and gets paid every two weeks. His paycheck goes directly to his prepaid debit card. Due to some unexpected expenses, Scott is applying for a payday loan. After visiting the storefront payday lender, Scott was denied the loan because he

Answers

Scott was denied the loan because he was not old enough to qualify.

What is the Payday loan?

Payday loan is a type of unsecured loan in which high rate of the interest is given to the borrower. It is a kind of the short term loan basically for the two weeks.

According to the above situation, Scott is cannot get the payback loan because he is minor to sanction a loan. He must have the age of 18 years or above.

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Why should investors know the difference between nominal and real interest rates?.

Answers

Why should investors know the difference between nominal and real interest rates is: To be able to to recognize the effects of inflation.

Nominal and real interest rates

It is important or paramount that investors know the difference between nominal and real interest rates as this will enable them to know the effect of inflation which occur when their is increase in the price of goods and service.

Nominal interest rates will help tell investors about the current situation in the market while Real rates will tell investor the returns they can gain so as to increase their capital.

Therefore Why should investors know the difference between nominal and real interest rates is: To be able to to recognize the effects of inflation.

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Labor costs that are clearly associated with employees who directly convert materials to finished product are called:

Answers

Labor costs that are clearly associated with employees who directly convert materials to finished product are called direct labor

What is direct labor?

Direct labour are labor that are used for production.

It includes casual workers in factory, processing and packaging.

Therefore, Labor costs that are clearly associated with employees who directly convert materials to finished product are called direct labor

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Which soft drink was specifically created by the coca-cola company to compete against dr pepper?.

Answers

Answer:

Coca-Cola is the official soft drink of many collegiate football teams throughout the nation, partly due to Coca-Cola providing those schools with upgraded athletic facilities in exchange for Coca-Cola's sponsorship. This is especially prevalent at the high school level, which is more dependent on such contracts due to tighter budgets.

Explanation:

Installation and start-up costs for utilities are called.

Answers

Installation and start-up costs for utilities are called seed or start-up capital. This is further explained below.

What is start-up capital.?

Generally, start-up capital. is simply defined as the money an entrepreneur raises to cover the startup expenses of a new business until it is profitable.

In conclusion, It is termed seed or start-up funding for utility installation and startup expenditures.

Answers

Answer:

recessionary phase.

Explanation:

The period of declining growth in real GDP between the peak of the business cycle and the trough is called the contractionary phase.

Economic contraction in GDP is the term used to describe the business cycle's downward slope. A period of declining economic production is known as a contraction. The economy is currently producing fewer goods and services than it did previously.

In order to create fewer goods and services, businesses must use fewer resources, especially labor. Businesses that reduce their output frequently hire few, if any, new employees and let some of their current employees go.

As a result, employment tends to decrease along with decreased output.

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An effect of changing legislation on human resources professionals is that: Multiple select question. they must update company HR policies and procedures to stay current with legal changes it reduces the cost of managing human resources they must stay current with changes in the law they must automatically increase compensation for all employees

Answers

They must update company HR policies and procedures is An effect of changing legislation on human resources professionals.

What is human resources?

Human resources is the recruiting department in the organization, that has many roles and responsibilities like payroll, fill the vacant position of the company, ensure the company's harmony, arranging the events in the organization.

Thus, option A is correct.

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How many employers ask that employees be skilled in communication and handling money? 47 50 67 86

Answers

Answer:47

Explanation:..

Assume Durango Co. had sales of $200,000 for the month of November. Sales are expected to grow 10% each month. The company collects 60% of sales in the month of sale and 40% in the month after sale. Projected cash collections for December total ______.

Answers

The cash collections of Durango Co. for the month of December over such given number of sales will be $212,000.

What is cash collection?

The total amount of receivables actually received by a business during a given financial period is regarded as the cash collection of the firm for such period.

Now, in the above given situation, the 40 percent cash collection amounting to $80000 from the month of November will be collected in the current month. Solving further,

[tex]\rm Cash\ Collection\ = Total\ Sales\ x\ \dfrac{Pecentage}{100}\\\\\rm Cash\ Collection\ = 220,000 x\ \dfrac{60}{100}\\\\\rm Cash\ Collection\ = \$132,000[/tex]

So, in total the cash collection for the month of December will be computed as, 80000+132,000=$212,000.

Hence, the cash collection of Durango Co. is aforementioned.

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Jennifer bought an AirFryer online and chose an in-store pick-up option. When she went to pick up the AirFryer, she was told that the product was sold out. Jennifer's dilemma is referred to as the _______, the anticipation of receiving a highly desirable option only to have it become inaccessible.

Answers

Jennifer bought an AirFryer online and chose an in-store pick-up option. When she went to pick up the AirFryer, she was told that the product was sold out. Jennifer's dilemma is referred to as the classic dilemma, the anticipation of receiving a highly desirable option only to have it become inaccessible.

What is classic dilemma?

Classic dilemma is a type of dilemma where an individual does not have a choice to pick or select.

The individual is faced with just a choice from the option.

Therefore, Jennifer bought an AirFryer online and chose an in-store pick-up option. When she went to pick up the AirFryer, she was told that the product was sold out. Jennifer's dilemma is referred to as the classic dilemma, the anticipation of receiving a highly desirable option only to have it become inaccessible.

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Your company's policy is to receive all office supplies without any changes made from the previous order. This order is referred to as a

Answers

The policy of the company is to receive all office supplies without any changes made from the previous order. This order is referred to as a straight rebuy.

What is the policy?

A policy is referred to as a set of rules, principles, or frameworks that every employee is restricted to follow. These policies are designed for the growth and fulfillment of the goals of the organization.

A situation when a company purchases the same goods from the same suppliers without making any changes to the previous order. This is called straight rebuy order.

When a company is unhappy with the services of a supplier and changes the pattern of order or changes in the purchase has been made by the procurement team, then this order will be called a modified rebuy.

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Gross domestic product tracks economic growth by measuring all goods and services

exported by an economy.
produced by an economy.
imported by an economy.
purchased by an economy.

Answers

Gross domestic product tracks economic growth by measuring all goods and services option B: produced by an economy.

What is Gross domestic product?

Gross Domestic Product is refers to as the measurement of the total value of the output of all the goods and services produced within a Financial year by the country.

Moreover, the term GDP does not include Intermediate goods and services because it is only concerned with the New and Current production.

Therefore, correct option is B.

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Answer:

B just got it right

Explanation:

__________ involves the review and evaluation of the records and processes that are used to prepare the organization's financial statements.

Answers

Answer:

this is a Financial audit

Which of these is the MOST accurate way to describe a typical manager from one hundred years ago?
OA gentle and kind
OB. strict and enforcing
OC. busy yet friendly
OD. talkative and bored

Answers

Answer:

The answer is strict and enforcing.

Explanation:

This is because the manager would keep all their workers in place, and prevent them from breaking any rules.

I’m going to go with strict and enforcing because back then was a different time period that we are in rn

Products whose demand rises when another product’s price increases are called.

Answers

Close Substitutes.

When the price of a commodity rises, the demand for its close substitute is likely to rise because the price of the close substitute remains the same.

You borrowed $1, 690 for 5.5 years compounded semi annually at an interest rate of 5.7%. What total do you pay back

Answers

Answer:

602.45 is the correct answer

Resources (such as land) and technology (such as the ability to draw water from a well):Multiple choice question.influence the likelihood that consumers will purchase the product.cannot be influenced by producers.are the most expensive inputs that producers use.contribute to how a good or service is produced for the market.

Answers

Resources and technology contribute to how a good or service is produced for the market.

What is Resources and technology used for?

The resources serves as the Primary factor of production while the technology forms part of the secondary factor of production.

They are both essential factor on how a good or service is produced for the market.

Therefore, the Option D is correct.