Answer:
Please kindly go through explanation for the answers.
Explanation:
A)The required return if Beta is 2 = 0.06+0.08*2 =0.22
B)Here Rf = 0.06
Expected return of the portfolio = 0.4*22% + 0.6*6% =12.4%
since beta of Rf = 0,the expected beta = 0.4*2 = 0.8
C)Beta is nothing but systematic risk of a security in comparing to the market. In this case stock z having beta of 1.5 which is less than beta of stockX i.e 2. and expected return is 15%.so stockz is offering lower return at lower risk. If the investor is a risk averse its a good buy.
D) let W be portion of stock X.
Then w*2 + (1-w)*0 = 1.5
W = 1.5/2 =0.75
to construct a portfolio which has a beta of 1.5 we have to invest 75% of our money in stock X and remaining in risk free asset
E) expected return = 0.22*.75 +0.25*0.06 = 16.5% + 1.5% = 18%
Answer:
$700
Explanation:
If a bond is issued at a lower price than the face value of the bond, then the bond is issued on the discount. This discount is amortized over the bond's life. This amortization will be expensed as Interest Expense.
Discount = Face value - Issuance price = $15,000 - $14,700 = $300
Bond's Life = 6 years
Amortization of discount = $300 / 6 = $50 annually = $25 semiannually
Coupon Payment = Face Value x coupon Rate = $15,000 x 9% = $1.350 annually = $675 semiannually
Interest Expense Includes both the coupon payment and discount amortization for the period.
Interest Expense = $675 + $25 = $700
Answer: A. the 99 principle
Explanation:
This strategy, often called "charm pricing," involves using pricing that ends in "9" and "99."
With charm pricing, the left digit is reduced from a round number by one cent. We come across this technique every time we make purchases but don’t pay attention. For example, your brain processes $3.00 and $2.99 as different values: To your brain $2.99 is $2.00, which is cheaper than $3.00.
How is this technique effective? It all boils down to how a brand converts numerical values. In 2005, Thomas and Morwitz conducted research they called "the left-digit effect in price cognition." They explained that, “Nine-ending prices will be perceived to be smaller than a price one cent higher if the left-most digit changes to a lower level (e.g., $3.00 to $2.99), but not if the left-most digit remains unchanged (e.g., $3.60 to $3.59).”
That statement is True
Internal Compliance is carried out to ensure that all process are done according to regulated rules and standard
Poor internal compliance could indicate that certain process is not carried out according to standard, which could damage the trust of internal customers
The value creation activities that deals with the design of products and production process is RESEARCH AND DEVELOPMENT.
Value chain activities are those activities that are put in place in order to create a product and get it to the final consumers. The series of activities involves include: research and development, production, marketing and sales and customer service.
