subject
Business, 26.03.2020 22:09 Russthaofficial

Assume that a risky security pays an average cash flow of $100 in one year. The risk-free rate is 5%, and the expected return on the market index is 13%. If the returns on this security are high when the economy is strong and low when the economy is weak, but the returns vary by only half as much as the market index, what risk premium is appropriate for this security

ansver
Answers: 2

Another question on Business

question
Business, 22.06.2019 04:00
Assume that the following conditions exist: a. all banks are fully loaned up- there are no excess reserves, and desired excess reserves are always zero. b. the money multiplier is 5 .     c. the planned investment schedule is such that at a 4 percent rate of interest, investment =$1450 billion. at 5 percent, investment is $1420 billion. d. the investment multiplier is 3 . e.. the initial equilibrium level of real gdp is $12 trillion. f. the equilibrium rate of interest is 4 percent now the fed engages in contractionary monetary policy. it sells $1 billion worth of bonds, which reduces the money supply, which in turn raises the market rate of interest by 1 percentage point. calculate the decrease in money supply after fed's sale of bonds: $nothing billion.
Answers: 2
question
Business, 22.06.2019 20:20
Why is it easier for new entrants to get involved in radical innovations when compared to incumbent firms? a. unlike incumbent firms, new entrants do not have to face the high entry barriers, initially. b. new entrants are embedded in an innovation ecosystem, while incumbent firms are not. c. unlike incumbent firms, new entrants do not have formal organizational structures and processes. d. incumbent firms do not have the advantages of network effects that new entrants have.
Answers: 2
question
Business, 22.06.2019 21:00
Which of the following statements is correct? stockholders should generally be happier than bondholders to have managers invest in risky projects with high potential returns as opposed to safe projects with lower expected returns. potential conflicts between stockholders and bondholders are increased if a firm's bonds are convertible into its common stock. takeovers are most likely to be attempted if the target firm’s stock price is above its intrinsic value. one advantage of operating a business as a corporation is that stockholders can deduct their pro rata share of the taxes the firm pays, thereby eliminating the double taxation investors would face in a partnership.
Answers: 1
question
Business, 22.06.2019 21:10
This problem has been solved! see the answerthe xyz corporation is interested in possible differences in days worked by salaried employees in three departments in the financial area. a survey of 23 randomly chosen employees reveals the data shown below. because of the casual sampling methodology in this survey, the sample sizes are unequal. research question: are the mean annual attendance rates the same for employees in these three departments? days worked last year by 23 employees department days worked budgets (5 workers) 278 260 265 245 258 payables (10 workers) 205 270 220 240 255 217 266 239 240 228 pricing (8 workers) 240 258 233 256 233 242 244 249 picture click here for the excel data filefill in the missing data. (round your p-value to 4 decimal places, mean values to 1 decimal place and other answers to 2group mean n std. dev variancesbudgets payables pricing total one factor anova source ss df ms f p-value treatment error total
Answers: 2
You know the right answer?
Assume that a risky security pays an average cash flow of $100 in one year. The risk-free rate is 5%...
Questions
question
Mathematics, 18.07.2019 16:30
question
Mathematics, 18.07.2019 16:30
question
Advanced Placement (AP), 18.07.2019 16:30
Questions on the website: 13722361