An analyst observes that the historic geometric nominal return for equities is 9%. Given a real return of 1% for riskless Treasury bills and annual inflation of 2%, the real rate of return and risk premium for equities are closest to:

Answers

Answer 1

Answer:

Real rate of return= 6.9%

Risk premium for equities= 5.8%.

Explanation:

Calculation to determine what the real rate of return and risk premium for equities are closest to:

Real rate of return =(1 + 0.09)/(1 + 0.02) - 1

Real rate of return=1.09/(1.02)-1

Real rate of return= 6.9%

Risk premium for equities=(1 + 0.09)/(1 + 0.01) - 1

Risk premium for equities=1.09/(1.01)-1

Risk premium for equities= 5.8%

Therefore the real rate of return and risk premium for equities are closest to:

Real rate of return 6.9%

Risk premium for equities 5.8%


Related Questions

It is April 2018 and Mark is a novice investor who wants to decide between purchasing shares in EagleCorp or Myna Bird Inc. In fiscal year 2017, EagleCorp's return on invested capital (ROIC) was 15 percent, and its cost of capital was 12 percent. During the same period, Myna Bird Inc.'s ROIC was 22 percent and its cost of capital was 25 percent. What does this information tell Mark? Question 1 options: Myna Bird Inc. is more likely to create value while EagleCorp is more likely to destroy value. EagleCorp is more likely to create value while Myna Bird Inc. is more likely to destroy value. Both Myna Bird Inc. and EagleCorp are likely to create value. Neither Myna Bird Inc. nor EagleCorp are likely to create value.

Answers

Answer:

EagleCorp is more likely to create value while Myna Bird Inc. is more likely to destroy value.

It is April 2018 and Mark is a novice investor who wants to decide between purchasing shares in EagleCorp or Myna Bird Inc. In the fiscal year 2017, EagleCorp's return on invested capital (ROIC) was 15 percent, and its cost of capital was 12 percent. During the same period, Myna Bird Inc.'s ROIC was 22 percent and its cost of capital was 25 percent. Here EagleCorp is more likely to create value while Myna Bird Inc. is more likely to destroy value.

ABC International sells a machine for $35,000 in cash on December 31, 2019. Initially this asset was purchased on 01 January 2013 for $100,000 with the estimated useful life of 10 years. Please prepare the journal entry and supporting calculations for this asset sale transaction.

Answers

Answer:

$1000023033500

Explanation:

100000*35000

Your friend Reggie needs to write a resume and asked for your help. In at least 150 words, create a guide for Reggie. What are the essential parts of the resume? What will he need to include? What will he need to avoid? Include information about how he should organize.

Answers

Answer:

Name

Address

Contact Number

Objective

Work Experience

Extra Curricular Activities

School Graduated

Referral

Signature

Explanation:

Simple steps in making a Resume

On average, a person with a bachelor's degree earns
than a person
with an associate degree and
than a person with a master's
degree.

Answers

Answer:

More than a person with an associate degree and less than a person with a masters degree.

Explanation:

In addition to the Small Business Job Protection Act of 1996 encouraging small businesses to allow employees to enroll into a 401(k), what percentage of vesting begins immediately for the employee

Answers

Answer:

100%

Explanation:

401(k) plans are financial provisions that guarantee financial security after retirement. Prior to the Small Business Job Protection Act of 1996, these provisions were bogus and difficult to understand/comply with by businesses. The Act simplifies the requirements and allows employees to enroll in the 401(k) plans where the annual contributions testing is bypassed. Employees vest 100% of their salary. This means that they cannot forfeit all the money contributed. After retirement, they can benefit from their deferrals and profits.

As a condition of his employment with an investment bank, Abasi Hasina, CFA, was required to sign an employment contract, including a non-compete clause restricting him from working for a competitor for three years after leaving the employer. After one year, Hasina quits his job for a comparable position with an investment bank in a country where non-compete clauses are illegal. Lawyers with whom he consulted prior to taking the new position determined that the non-compete clause was a violation of human rights and thus illegal. Did Hasina most likely violate the CFA Institute Code of Ethics and Standards of Professional Conduct

Answers

Answer:

Yes

Explanation:

In simple words, as per the CFA institute code and standards for ethical and professional conduct, a finance professional must obey the stricter law when conflicted by the national law of the country they are working in and the CFA institute rules and guidelines.

Since the CFA institute regulates and guide to protect the benefit of the employer, we can conclude that Abasi Hasina has violated the CFA institute codes.

Consider five individuals with different occupations. Allen prepares taxes wants ribs Betty does dry cleaning wants computer fixed Calvin fixes computers wants bread Diedre bakes bread wants taxes prepared Eric barbecues ribs wants dry cleaning If this economy has money a. Allen will buy from Betty b. Betty will buy from Calvin c. Eric will buy from Allen d. None of the above are correct.

Answers

Answer:

D. None of the above are correct.

Help me with questions 1 - 4

Help me!!!!!!!!!!!!! It’s for music class or orchestra

I need help please!!! Due tomorrow

Answers

answer:-

it is for music class and I don't know the notes

Erosion can be described as the _____________________. Multiple Choice expenses that have already been incurred and cannot be recovered change in net working capital related to implementing a new project cash flows of a new project that come at the expense of a firm's existing cash flows alternative that is forfeited when a fixed asset is utilized by a project differences in a firm's cash flows with and without a particular project

Answers

Answer:

washing away of the top most layer of the Earth surface

Reasons for looting ​

Answers

Answer:

if anyone do something wrong

Answer:

There are several reasons people loot, the most common being a retaliation against someone or something ( an anger towards a business or company ) and leads to plundering the goods of a store or shop. It's also a sad but common theme to loot after natural disasters, such as a hurricane or earthquake. Less common is looting in war, and the only reason it's less common is because fortunately we don't have any wars at the immediate moment

Owning a patent: Multiple Choice Gives its owner an exclusive right to manufacture and sell a device or to use a process for 50 years. Gives the owner exclusive rights to manufacture and sell a patented item or to use a process for 20 years. Gives the owner the exclusive right to publish and sell a musical or literary work during the life of the creator plus 70 years. Gives its owner the exclusive right to publish and sell a musical or literary work during the life of the creator plus 17 years. Indicates that the value of a company exceeds the fair market value of a company's net assets if purchased separately.

Answers

Answer:

Gives the owner exclusive rights to manufacture and sell a patented item or to use a process for 20 years

Explanation:

A patent is defined as a rights that the owner of an innovative product or process has that allows him to exclusively manufacturer the product or have the only right to use a particular process for 20 years.

Usually the item patented gives a new way of solving problems.

Any duplication of the product or service that is patented has to be with the consent of the owner.

Patents allow inventors of products and services to be adequately compensated.for their innovation.

The actions that top executives should take to lead the strategy execution process include Multiple select question. rewarding employees for performing their assigned duties. knowing what's going on at all levels of the organization. helping employees execute strategy successfully. making sure results are strategy-oriented.

Answers

Answer:

helping employees execute strategy successfully.

knowing what's going on at all levels of the organization.

making sure results are strategy-oriented.

Explanation:

The actions where the top executives result in the strategy execution process  involves the employees for helping to execute the strategy in a successful manner. Also we are aware what things are going on at all levels i.e. top, middle and bottom. In addition to this, the results that comes should be strategy-orinted

Therefore the above 3 statements should be considered

A business decides to produce less of an item. Which of the following occurs?

The business is attempting to indirectly influence supply.

The business is directly influencing demand.

The business is attempting to indirectly influence demand.

The business is directly influencing supply.

Answers

Answer:

c

Explanation:

Assume that Heather always maximizes her total utility given her budget constraint. Every morning for breakfast Heather has two eggs and three sausages. If the marginal utility of the last egg is 20 utils and the price of eggs is $2 each, what can we say about the marginal utility of the last sausage if the price of each sausage is $1

Answers

Answer: 10 units

Explanation:

The marginal utility per dollar spent on the last egg should be equal to the marginal utility per dollar spent on the last sausage.

Marginal utility per dollar spent on last egg = Marginal utility / Price of egg

= 20 / 2

= 10 units per dollar

Marginal utility per dollar spent on last sausage = Marginal utility / Price of sausage

10 = Marginal utility / 1

Marginal utility = 10 units

Which of the following is a direct financial interest? An interest where the individual is not the record owner but has a right to some or all of the underlying benefits of ownership

Answers

Answer: One owned directly by the covered member (even if managed by others.

Explanation:

A direct financial interest refers to the financial interest which is owned directly by an individual, under the control of an individual or beneficially owned through the investment vehicle.

A direct financial interest is one that is owned directly by the covered member (even if managed by others). Direct financial interest simply implies the ownership or the part ownership of a business, and this includes stocks, bonds, lands etc.

Hey y'all...

Can you guys help!!

How is foreign employment protectional /development board supportive to the foreign employment?

Use your own language!!

Thanks!!​

Answers

Answer:

The development objective of the project is to contribute to poverty reduction in Nepal, through reducing the vulnerability of Nepalese migrant workers to forced labour and trafficking, and increasing opportunities for safe and productive migration for employment overseas.

The development objective of the project is to contribute to poverty reduction in Nepal, through reducing the vulnerability of Nepalese migrant workers to forced labour and trafficking, and increasing opportunities for safe and productive migration for employment overseas

AmeriSource is a distributor of pharmaceutical products and related health-care services. It merged with Bergen in 2001 to become AmerisourceBergen. It provides a wide assortment of pharmaceutical products to health-care institutions such as hospitals. It also provides technical advice, equipment, and support for health-care institutions throughout the United States. AmerisourceBergen is best classified as a

Answers

Answer:

full-service wholesaler.

Explanation:

Based on the description in the question, AmerisourceBergen is best classified as a FULL-SERVICE WHOLESALER.

A full-service wholesaler or full function wholesaler is defined as a wholesaler who offers various forms of services such as buying, selling, storing, transporting, sorting, financing, providing market feedback, and risk-taking activities while serving the industry to which it belongs.

Hence, in this case, the right answer is A FULL-SERVICE WHOLESALER

Fresh Breath Enterprises (FBE) is a well-known manufacturer of mouthwash. Its main facility is a mint-processing plant, which is currently operating at only 60% capacity. FBE is considering the introduction of a line of mint chewing gum that would use the same mint-processing plant as part of its production process. This proposed production scenario is an example of:

Answers

Answer:

Economies of scope

Explanation:

In the case of economies of scope, the efficiency should be attained via generating the variety of goods and services. In this the production cost is reduced at the time when different kinds of products are being produced

so as per the given situation, it is an example of the economies of scope

Therefore the same is to be considered and relevant

Project A has an initial cost of $75,000 and annual cash flows of $33,000 for three years. Project B costs $60,000 and has cash flows of $25,000, $30,000, and $25,000 for Years 1 to 3, respectively. Projects A and B are mutually exclusive. The incremental IRR is _______ and if the incremental IRR is lower than the required rate of return then Project _______ should be accepted.

Answers

Answer:

12.89%

the project should not be accepted

Explanation:

Incremental IRR can be determined by subtracting the cash flows of the project with the smaller cost from the cash flows of the project with the higher initial cost then using the cash flow derived to calculate the IRR

Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested

IRR can be calculated with a financial calculator  

Incremental cash flow in year 0 = -(75,000 - 60,000) = -15,000

Incremental cash flow in year 1 = 33,000 - 25,000 = 8,000

Incremental cash flow in year 2 = 33,000 - 30,000 =  3,000

Incremental cash flow in year 3 =  33,000 - 25,000 = 8,000

IRR = 12.89%

A project should be accepted only if the incremental IRR is greater than the required return. If this is not the case, the project should not be accepted

To determine IRR using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the IRR button and then press the compute button.  

Feel Good Inc. is a multinational sports goods manufacturer that uses a different strategy in each of its subsidiaries and operations. Moreover, all decision-making is decentralized, which leaves the company open to the threat of opportunistic behavior. Since the expatriate managers do not rely on headquarters expertise, there is also an asymmetry in the transfer of information and specialized knowledge. In the context of the four international strategies proposed by Bartlett and Ghoshal, Feel Good Inc. uses a(n) _____.

Answers

Answer:

multidomestic strategy.

Explanation:

It is correct to state that in the context of the four international strategies proposed by Bartlett and Ghoshal, Feel Good Inc. uses a multi-domestic strategy, which occurs when a company uses several different marketing strategies according to the location where it operates.

Feel Good Inc uses a multi-domestic strategy because the statement tells us that the company uses a different strategy in each of its subsidiaries and operations, and that decision-making is decentralized.

This strategy can be advantageous for adapting the marketing campaign to the needs and desires of a specific target audience in a place. To be effective, market research, population study and market segmentation must be carried out.

The AD Curve ________. A) indicates the level of aggregate output corresponding to different goods-market-clearinglevels of the inflation rateB) is downward sloping, because with higher inflation comes higher interest rates and lower spending, so equilibrium aggregate output declines C) explains how inflation affects output in the short runD) all of the above

Answers

Answer:

D) all of the above

Explanation:

The AD curve shows the aggregate output level that should be for different kinds of goods have the inflation rate

It is downward sloping due to more inflation that raised the inflation rate due to this less spending should be there

Also it described how the inflation impacts the output for the short period of time

Therefore the option d is correct

Office Manager: definition, what do they do?

And, what is the training I need to become an office manager?

Answers

Explanation:

essentially ensure the smooth the running of an office day to day basis and may manage a team of administrative or support staff

A city filed eminent domain proceedings in order to obtain 40 beach houses fronting a particularly attractive stretch of shoreline. As part of an elaborate plan to increase the city's tourist trade and revive the local economy, the city planned to sell the beach houses to a company that would demolish the houses and build a luxury hotel in their place. The owners of the beach houses have challenged the city's exercise of eminent domain, contending only that the city's plan is unconstitutional. Will the owners of the beach houses be likely to prevail

Answers

Answer:

No, because the planned sale to the private developer to increase the tourist trade qualifies as a public use.

Explanation:

Eminent domain is the provision that gives a government the ability to take a private property and convert it to public use. The owner of the property is however required to be compensated adequately.

In this instance the city filed eminent domain proceedings in order to obtain 40 beach houses as part of an elaborate plan to increase the city's tourist trade and revive the local economy.

Since this is for public gain the city has a legal right to file for an eminent domain here.

So the owners will most likely not prevail in this situation

The price elasticity of supply measures how Multiple Choice easily labor and capital can be substituted for one another in the production process. responsive the quantity supplied of X is to changes in the price of X. responsive the quantity supplied of Y is to changes in the price of X. responsive quantity supplied is to a change in incomes.

Answers

Answer:

Yes

Explanation:

Cause an increase in price causes increase in goods produced

The marketing strategy that a company adopts: a. has little impact on the company's efficiency and cost structure. b. aims at attaining superior efficiency of the company's operations. c. should not take into account the impact the strategy has on the company's cost structure. d. aims at automating much of the work in the production process. e. refers to the position that the company takes with regard to a product's pricing and distribution.

Answers

Answer:

e. refers to the position that the company takes with regard to a product's pricing and distribution.

Explanation:

When a company produces a good or service it need to come up with a way of making it available to the customer at a profitable price. This is called marketing strategy.

Marketing strategy is defined as the overall plan that a company uses to reach consumers with their products with a view of making them customers.

It contains the brand message, value proposition, data on demographics of the consumer, distribution method, and pricing

The assumption that preferences are complete: Group of answer choices means that a consumer will spend her entire income. means that the consumer can compare any two market baskets of goods and determine that either one is preferred to the other or that she is indifferent between them. is unnecessary, as long as transitivity is assumed. recognizes that there may be pairs of market baskets that cannot be compared.

Answers

Answer:

means that a consumer will spend her entire income. means that the consumer can compare any two market baskets of goods and determine that either one is preferred to the other or that she is indifferent between them

Explanation:

In the case when the presumption is to be considered as completed means that the consumer would able to spend her overall income. That means the consumer could compared any kind of two markets for the goods and measures which one is to be preferred over the other or it is indifference between them

So as per the given situation, the first option is correct

The LIFO reserve is the difference between the inventory valuation as reported under: Multiple choice question. LIFO and the amount that would have been reported under weighted-average. FIFO and the amount that would have been reported under LIFO. weighted-average and the amount that would have been reported under LIFO. LIFO and the amount that would have been reported under FIFO.

Answers

Answer:

One Of Them, I Think, Is Called The LIFO reserve

Explanation:

The natural rate of unemployment is best defined as A. the state of the economy when there is zero unemployment. B. the rate of unemployment when there is no frictional or cyclical unemployment. C. the rate of unemployment when there is no cyclical or structural unemployment. D. the rate of unemployment after all workers and employers have fully adjusted to all changes in the economy.

Answers

Answer:

The answer is D

Explanation:

Natural rate of unemployment is the rate at which labor market is in equilibrium. In other words, it is the the rate of unemployment after all workers and employers have fully adjusted to all changes in the economy.

Adams, a general contractor, Brinks, an architect, and Carson, an interior decorator, formed the Dex Home Improvement General Partnership by contributing assets as follows: Fair % of Partner Share Adjusted Market in Capital Asset Basis Value Profits and Losses Adams Cash $40,000 $40,000 50% Brinks Land $12,000 $21,000 20% Carson Inventory $24,000 $24,000 30% The land was a capital asset to Brinks, subject to a $5,000 mortgage, which was assumed by the partnership. Brinks' initial basis in Dex is:

Answers

Answer:

8,000

Explanation:

Calculation to determine what Brinks' initial basis in Dex is:

Carryover Basis of Land Contributed by Brinks $12,000

Less Mortgage Assumed by the Partnership ($5,000)

Add Mortgage percentage Kept by Brinks $1,000

(.20 x $5,000)

Brink's Initial Basis $ 8,000

($12,000-$5,000+$1,000)

Therefore Brinks' initial basis in Dex is: $8,000

Economists argue that: (1pts) Question 4 - Economists argue that: Select b) there is an opportunity cost associated with all decisions. as your answer b) there is an opportunity cost associated with all decisions. Select c) economic decisions do not have opportunity costs but other decisions do. as your answer c) economic decisions do not have opportunity costs but other decisions do. Select a) accounting costs consider all types of costs including implicit costs as your answer a) accounting costs consider all types of costs including implicit costs Select d) economic decisions should consider sunk costs as your answer d) economic decisions should consider sunk costs

Answers

Answer:

b) there is an opportunity cost associated with all decisions.

Explanation:

An opportunity cost represents a potential benefit for the individual and business. An opportunity coast shows business users the concept of education decisions. As they have multiple options before them. It is the value of what one looses over another value.
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Theorem 8.9 : The line segment joining the mid-points of two sides of a triangle is parallel to the third side. prove this theorem What is the sale price of this bed after the discount has been taken off the standard price? URGENT PLS HELP what is 7.65% of $509.25 Why are sponges considered as parazoa Media and technology do not have an impacton your health,True False gip t vi, mnh hc lp 9 sContinent E is , the largest of the worlds seven continents.Australia is continent .Continent C is . Given three different prime numbers [tex]p_1 \ \ ; \ \ p_2[/tex] and [tex]p_3[/tex] satisfy equation [tex]p_1+p_2+p_3=202[/tex] . Find the maximum value of [tex]\pmb {p_1 \times p_2\times p_3=?}[/tex] Egg come first in this world or hen come first What type of polynomial is: -2/3 b^3 PLEASE HELP! A machine uses filtration to separate a component from orange juice. Which component does the machine most likely separate from the mixture?A - PigmentB - SugarC - PulpD - Water Read the following group discussion about utopias (perfect societies) and dystopias (hellish societies). VICTOR: If you all read Sanchez's article, you know that she argues that Aldous Huxley's Brave New World is a utopian novel, not a dystopian novel. It's a negative society for the main character only because he's a weirdo, an outsider. Everybody else is happy. RIKU: Yeah, but keep in mind how Sanchez defines a utopia. Her idea of a perfect society is one where everybody is ranked by ability and there isn't any conflict - not even disagreements. EDGAR: What's your point? RIKU: My point is that Sanchez's idea of a perfect society is all about rules and order. I know that my idea of a utopia is totally different from that, and it's probably different from a lot of other people's, including Huxley's.MARIA: In that case, what are some other examples of utopias? Ones that aren't orderly like the society in Brave New World?Edgar: Why don't we each find a different example of a utopian society in literature and see how they're different?VICTOR: O.K., I pick Thomas More's Utopia. I haven't read it yet so we'll see what he thinks.Which student is MOST clearly evaluating an author's point of view? factorize = n!+(n-1)! gii h em cu THU ny ni v ng hay sai v gii thch , a ra li gii gip em , em cm n mi ngi DN nhp mt l hng vi s lng l 10.000sp A; theo gi FOB cng nc XK 1usd/sp. chi ph vn ti F v BHQT I phi tr bng 20% gi nhp ca l hng. t gi hi oi tnh thu 20.000 vn/usd. Thu sut TNK 20% (TNK c gim 20% s thu phi np) , TTTDB 15%, TGTGT 10%. TNK, TGTGT, TTTB phi np ca l hng A ny ln lc l : 38.400.000 ; 27.840.000; 45.936.000. ayudenme pls aaaaaaaaaaaaaaaaaaaaaaaaaaaa HELP ME PLZWhere in an argumentative essay would this excerpt most likely belong? Please help (I didnt know what subject to put this in but its earth science) Put the equation in standard form: Ax+By=CEquation: 2y= x - 1 What is the equation of exponential regression equation? Round all numbers you your answer to three decimal places