Security A = return of 15%, SD of 8%, beta of 1.2Security B = return of 12%, SD of 14%, beta of 0.90a. Which of A and B has the least total risk? The least systematic risk?b. What is the value of systematic risk for a portfolio with 75% of the funds invested in A and 25% of the f...
What is the (net price equivalent rate-in decimals, Single Equivalent discount rate-in decimals, trade discount and net price)of a digital camera with List price $450 and chain discount 8/3?
(TCO H) Audit risk consists of inherent risk, control risk, and detection risk. (a) Please completely define each of the above. (b) Indicate whether each of the statements below is true or false and explain your position. (1) The risk that material misstatement will not be preven...
Nico Manufacturing is considering investment in one of two mutually exclusive projects X and Y which are described below. Nico Manufacturing's overall cost of capitalis 15 percent, the market return is 15 percent and the risk-free rate is 5 percent. Nico estimates that the beta f...
Hula Enterprises is considering a new project to produce solar water heaters. The finance manager wishes to find an appropriate risk adjusted discount rate for the project. The (equity) beta of Hot Water, a firm currently producing solar water heaters, is 1.2. Hot Water has a...
Risk-adjusted discount rates-Basic Country Wallpapers is considering investing in one of three mutually exclusive projects E, F, and G. The firm's cost of capital, r, is 15.4%, and the risk-free rate, RF, is 9.8%. The firm has gathered the following basic cash flow and risk...
Asset A has a CAPM beta of 1.5. The covariance between asset A and asset B is 0.13. If the risk-free rate is 0.05, the expected market risk premium is 0.07, and the market risk premium has a standard deviation of 25%, then what is asset B's expected return under the CAPM?...
Revenuesproffeseeional fees earnedrent earneddividends earnedinterest earnedtotal revenuesExpensesdepreciation expense- buildingdepreciation expense equipmentwages expenseinterest expenseinsurance expenserent expensesupplies expensepostage expenseproperty tax expenseRepairs expen...
Fred exchanges a piece of business land (FMV 90,000; adjusted basis $50,000) and cash $1,000 for another piece of business land (FMV 70,000; adjusted basis $30,000) and $10,000 cash. a. What is Fred’s realized gain/loss on the transaction? b. What is Fred’s recognized gain/loss o...
The standard Deviation represents the risk of a stock, is the risk of the average stock value greater than or less than the risk of each individual stock. You have a portfolio of 40 stocks with the return on each stock having a mean of 4% and a standard deviation of 5%. I need t...
Suppose a firm estimates its cost of capital for the coming year at 10%, what are reasonable costs of capital for evaluating average-risk, high-risk, and lo-risk projects?
Firm-specific risk, country-specific risk and global-specific risk are under the 3 types of political risk. In the United States, address the current political risks in terms of firm-specific risk(in a country but in respect of a company), country-specific risk (within the countr...