between the return on Apple stock and the S&P 500 is 0.12. The variance of the return on the S&P 500 is 0.09. Apple stock is: Riskier than the market Less risky than the market As risky as the market Expected to have a good return when the market is doing poorly None of the above
Q: The Cookie Jar bakes 80 dozen cookies at a cost of $1.08 per dozen. If a markup of 60% on selling…
A: Solution:- Markup means the percentage margin either on cost or sales price.
Q: School fees at a certain school are due at the beginning of the year. The fees are set at R12000 for…
A: When the future amount is deposited at a regular interval with the growth in the periodic deposit…
Q: X is the only daughter of the richest man in the Philippines. Her father and mother died in an…
A: The answer is option D. No, X is not yet the real owner of the properties of her parents so she…
Q: Knight Inventory Systems, Incorporated, has announced a rights offer. The company has announced that…
A: Here, No. of Right is 3 Price before ex right date is $80 Price after ex right date is $60…
Q: Data for two alternatives are as follows: Alternatives A B Investment P35, 000 P50, 000 Annual…
A: NPV is the difference between the Present Value of Cash Inflows and Initial Investment. A project…
Q: Sales of SEUNGCHEOL Co. for the first 3 months of 2022 are: January – ₱750,000; February – ₱673,800;…
A: Cash flows are the cash generated from the operation of the business organisation. In other words,…
Q: Which of the following is NOT a required disclosure (if applicable), either by the seller or by the…
A: Ans: Confirmation of agency: Every real estate licensee is required to disclose his or her agency…
Q: determine the average collection period( days) for pepsi CO. for year 2019, 2020,2021
A: In Millions As per the Consolidated Financial Statement Particulars 2021 2020 2019 2018…
Q: GetAHead plc manufactures hats. The company has just paid a dividend of £0.20 per share and…
A: The Dividend Growth Model refers to a model that helps in calculating the intrinsic value of a stock…
Q: the main role of Activity Ratio for pep
A: Activity ratio are very important metrics to judge the efficiency of the company and how company is…
Q: Where did global financial crisis begin?
A: After the great depression of 1930 the global financial crisis was seen in 2007-2008 based on…
Q: JL Bank offers a business loan with an initial amount of 6,000,000 pesos at a rate of 3% compounded…
A: Loan Amortization: It is the most common way of scheduling out a fixed-rate credit into equivalent…
Q: Consider the followingalternatives: i. $120 received in one year ii. $220 received in five years…
A: The present value method is used to find out the profitability of a project by adding up discounted…
Q: How much will you have saved after 6 years by contributing $1200 at the end of each year if you…
A: Future value refers to the value that an amount would assume at a future time period after…
Q: Private banking is the provision of wealth management services to high net worth individuals who…
A: A bank may be a sort of financial organization that's permitted to simply accept deposits and supply…
Q: What is an "Ethereum Request for Comment"? Who is an "oracle"? What is an oracle problem? What is a…
A: It is normally used as ERC. It is a standard mechanism for issuing tokens on the Ethereum network.
Q: forecase sales for the period of April to August using the weight as given
A: An important part of financial management is budgeting and forecasting future sales. Forecasting is…
Q: A check was issued by L. The name of the payee written on the face of the check is “Cardo Dalisay…
A: a)Order Instrument-An order paper, also known as an order instrument, is a negotiable instrument…
Q: School fees at a certain school are due at the beginning of the year. The fees are set at R12000 for…
A: This question can be answered in light of time value of money. The time value of money is a concept…
Q: moderale curent asset inveatment policy, but it is now considering a change, perhaps to a restricted…
A: Answer- 1. Restricted policy where current assets are 20% of sales. Sales = $400,000 Current…
Q: Now suppose that annual unit sales, variable cost, and unit price are equal to their respective…
A: Concept. Annual profit = revenue - variable cost - fixed cost.
Q: O puts; 625 contracts.
A: Hedge refers to the risk management strategy employed to cover the loss in investments by opting for…
Q: The company just paid a $1.48 annual dividend and announced the plans to pay $1.54 next year. The…
A: Constant and non-constant growth dividend model : The main distinction between a constant and…
Q: Fran has made a taxable gift of one-half of the value of the residence because Stan paid no…
A: Gift tax charges on the value of large gifts which is transferred and affect the wealth without any…
Q: A company estimates that a certain piece of machinery will have to be replaced in five years' time…
A: Future value of growing annuity (due) = [P/(r-g)] *((1+r)^n - (1+g)^n / (r-g))P = Initial payment =…
Q: If the billing cycle is from the first day of April to the last day of April, how many days are in…
A: Billing cycle is the time period between two statement closing dates. It is also called billing…
Q: Which of the following is not an assumption made by Modigliani and Miller in relation to the…
A: The question is related to theories of Capital Structure. As per MM Approach, a change in…
Q: Suppose that an investor has £1,000,000 to invest in a portfolio containing stocks A, B and a…
A: Objective: Portfolio of Stock A, Stock B and risk free asset Portfolio with expected return of 14%…
Q: Suppose you require a 10% return on your investments while purchasing a stock tha ently trading at…
A: For a stock investment return on investment is the quantum of net profit or benefit or gain that…
Q: Joe Levi bought a home in Arlington, Texas, for $141,000. He put down 25% and obtained a mortgage…
A: Loan: It is the amount of credit taken by the borrower from the lender. The borrower makes periodic…
Q: You are considering a stock investment in one of two firms (LotsofDebt, Inc. and LotsofEquity,…
A: Ratio analysis is the method of checking the company's operational efficiency, liquidity, and…
Q: Wendell’s Donut Shoppe is investigating the purchase of a new $42,800 donut-making machine. The new…
A: Here, Initial Investment is $42,800 Cost Savings is $5,700 Contribution per dozen is $1.50 No. of…
Q: contract of sale
A: The answer is option A. Valid. The contract rendered here is a valid contract.
Q: orth 1% compounded semi-annually. 2. Don Solomon wants to set up a scholarship program with his alma…
A: Present value can be found the given period and interest rate and given period of compounding of…
Q: You plan to invest in either a mutual fund X or mutual fund Y. The following information about the…
A: Two asset portfolio expected return: The anticipated return on an investment is the value assigned…
Q: Mega Company purchased 12 years ago a Mega Pen for P50,000. As the life of the Mega Pen was 20…
A: Straight-line depreciation method is the most common and easiest method to calculate depreciation.…
Q: 1. A Machine costs P80,000 and an estimated life of 10 years with a salvage value of P5,000. What is…
A: Depreciation can be defined as the reduction in the value due to wear and tear in asset over a…
Q: School fees at a certain school are due at the beginning of the year. The fees are set at R12000 for…
A: The answer for this question can be calculated in the light of time value of money. Time value of…
Q: Andrew wants to open an account for his grandson that he hopes will have $30,000 in it when he turns…
A: Given, Amount required at end of 21 years = 30,000 Interest per month = 2.5/12 = 0.20833% Time…
Q: 19. Odette has a base monthly salary of S1,500 and eams a 5% commission on all sales she makes at…
A: The amount of compensation paid based on the amount of sales made is a sales commission. It is…
Q: How much should you invest each month in order to have $500,000 if your rate of return is 3.9%…
A: Here we will use the concept of time value of money. As per this concept worth of money changes with…
Q: Additional Information: (a) Gross profit rate for 2019 is 50%, which decreased by 5% in 2020 due to…
A: While preparing an income statement, we can use ratio analysis to find out the missing figures. For…
Q: |Company 2019 Gross Revenue $4,250,000| Company 2019 Gross $1,628,000| Profit Annual 58% Retention…
A: Customer lifetime value (CLV) is a measure of the average customer's revenue generated over their…
Q: LExplain what happens to the bond price and interest rate and why. i) i1) ii1) Expected inflation…
A: A bond's price is the present discounted value of its future cash flow. It denotes the total of the…
Q: What is the present value of $44,100 to be received in 10 years; i = 7%. Present value %24
A: Present value = Future Value / (1+i)n Where i = Interest or discount rate n = Number of years
Q: An investor is holding bonds with long duration and interest rates are expected to rise. What advice…
A: Long term bonds are sensitive to interest rates. Investors holding long-duration bonds possess…
Q: When a stock repurchase occurs, which of the following is not correct? a. EPS decreases b. Shares…
A: Solution:- Share repurchase means that the company (ie. the issuer) buybacks the shares from the…
Q: Question 3 Your firm has net income of $273 on total sales of $1,180. Costs are $660 and…
A: As per formula Operating cash flow = Net income+Depreciation Where Net income = $273 Depreciation…
Q: Question 1 Adamyan Co. manufactures and sells medals for winners of athletic and other events. Its…
A: Variable Cost-A variable cost is a business expense that fluctuates depending on how much the…
Q: Globex Corporation plc shares are currently trading at $5.00 each. Management wishes to raise…
A: Ex-Rights Share price: It is the market value that a stock will hypothetically have following a new…
The covariance between the return on Apple stock and the S&P 500 is 0.12. The variance of the return on the S&P 500 is 0.09. Apple stock is:
-
Riskier than the market
-
Less risky than the market
-
As risky as the market
-
Expected to have a good return when the market is doing poorly
-
None of the above
Step by step
Solved in 2 steps
- Calculate the correlation coefficient between Blandy and the market. Use this and the previously calculated (or given) standard deviations of Blandy and the market to estimate Blandy’s beta. Does Blandy contribute more or less risk to a well-diversified portfolio than does the average stock? Use the SML to estimate Blandy’s required return.The standard deviation of stock returns for Stock A is 40%. The standard deviation of the market return is 20%. If the correlation between Stock A and the market is 0.70, then what is Stock A’s beta?Security A has an expected return of 7%, a standard deviation of returns of 35%, a correlation coefficient with the market of −0.3, and a beta coefficient of −1.5. Security B has an expected return of 12%, a standard deviation of returns of 10%, a correlation with the market of 0.7, and a beta coefficient of 1.0. Which security is riskier? Why?
- Security A has an expected rate of return of 6%, a standard deviation of returns of 30%, a correlation coefficient with the market of −0.25, and a beta coefficient of −0.5. Security B has an expected return of 11%, a standard deviation of returns of 10%, a correlation with the market of 0.75, and a beta coefficient of 0.5. Which security is more risky? Why?The covariance between the return on Apple stock and the S&P 500 is 0.12. The variance of the return on the S&P 500 is 0.09. Apple stock is:a. Riskier than the marketb. Less risky than the marketc. As risky as the marketd. Expected to have a good return when the market is doing poorlye. None of the aboveA single stock, A has a variance of 0.006 and a covariance with the market portfolio given by 0.013. The market portfolio has an expected return of 10.50%, a market risk premium 4.30% and a variance of 0.013. What is the stock's fair expected return under the CAPM?
- The following are estimates for a stock A. Stock Expected ret. beta firm-specific variance, or Var(e) A 0.15 1.3 0.34 The market index has a standard deviation of 0.22, and the risk-free rate is 0.03 What percentage of stock A's total risk is attributable to systematic risk (or market risk)? Here consider variance as the risk measure. Round your answer to 4 decimal places. For example if your answer is 3.205%, then please write down 0.0321.Which of the following statements is INCORRECT? A stock's beta is calculated as the covariance between the stock's price and the market portfolio return, divided by the variance of the market portfolio return. If we assume that the market portfolio (or the S&P 500) is efficient, then changes in the value of the market portfolio represent systematic shocks to the economy. The risk premium investors can earn by holding the market portfolio is the difference between the market portfolio's expected return and the risk-free interest rate. A stock’s standard deviation is a measure of the total risk.The beta of Southeast has been estimated to be 0.85. Which of the following statements about Southeast is FALSE? Question 9 options: If the market falls by 1%, Southeast would be expected to fall by 0.85%. The sign of the covariance between Southeast and the market is greater than zero. Southeast is considered to be less risky compared to the market. The covariance between Southeast and the market divided by the variance of the market is equal to 0.85. If the market rises by 1%, Southeast would be expected to rise by 1.85%.
- Stock Y has a Beta of 0.95 while the standard deviation of its residual is 0.24. The standard deviation of the Market portfolio is 0.19. What percent of the total variance of Stock Y comes from systematic risk? Group of answer choices 36.1% 59.0% 62.3% 44.4% None of the aboveAssume the CAPM holds and consider stock X, which has a return variance of 0.09 and a correlation of 0.75 with the market portfolio. The market portfolio's Sharpe ratio is 0.30 and the the risk-free rate is 5%. (a) What is Stock X's expected return? (b) What proportion of Stock X's return volatility (i.e. standard deviation) is priced by the market? Explain why this number is less than 1.Suppose the index model for stocks A and B is estimated with the following results:rA = 2% + 0.8RM + eA, rB = 2% + 1.2RM + eB , σM = 20%, and RM = rM − rf . The regressionR2 of stocks A and B is 0.40 and 0.30, respectively.(a) What is the variance of each stock? (b) What is the firm-specific risk of each stock? (c) What is the covariance between the two stocks?
