(a) Compute and identify the stock that has the most systematic risk. (b) Compute and justify the stock that has the most unsystematic risk. (c) Identity and justify which stock is "riskier".
Q: A company prepares the master budget by taking each division manager's estimate of revenues and…
A: Managers that use this technique run the risk of underestimating expectations and exceeding them. In…
Q: Nash SA uses a calendar year for financial reporting. The company is authorized to Issue 8,850,000…
A: calculation of weighted average ordinary share used in computing earnings per share for 2022 on the…
Q: t December 31, 2022 Mindoro Corporation’s taxable profit is P5,000,000. The following items are the…
A: Lets understand the basics. When there is temporary taxable differencce arise between the taxable…
Q: Should WLW lease or construct their own production facility Option 1: Construct Costs to incur:…
A: Net Present Value=(Present Value of Cash Inflows-Present Value of Cash Outflows)
Q: R&D is assumed to have a two-year life in the AC Division and a nine-year life in the SO division.…
A:
Q: Original payment of $3057 due today is settled by two equal payments due in 2 and 8 months. Assuming…
A: We will use the concept of time value of money here. As per the concept of time value of money the…
Q: 1. What are the Harry's cash proceeds from issuance of these bonds, presuming that the selling price…
A: As the bond's quoted rate is less than the market rate the bond will be issued in discount and the…
Q: Raw Materials: nventory, Jan. 1 ssuance to production Purchases on account Factory Labor: Total…
A: The cost of goods manufactured includes the total cost of goods that are finished during the period.…
Q: Gabbe Industries is a division of a major corporation. Last year the division had total sales of…
A: Ratio analysis helps to analyze the financial statements of the company. The management can make…
Q: 24) Which account would be reported on the income statement? A. Interest Expense B. Notes Payable C.…
A: Income statement refers to the one of the financial statements of the company which is being…
Q: (a) How many payments will be paid? (b) What is the size of the final annuity payment?
A: Given in the question: Annuity Cash Value $12,000 Payment at the beginning of every six…
Q: pls answer thanks
A: Note: Hi! Thank you for the question, As per the honor code, we are allowed to answer three…
Q: 8) At year end, a business has an accounts receivable balance of $245,000. The allowance for…
A: The allowance for doubtful accounts is the contra assets for the business and has a normal credit…
Q: Hardy Co's unit production cost under variable costing is $21, and $28 under absorption costing. Net…
A: “Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: Which of the following does not appear in a statement of retained earnings? Choices; Net loss…
A: Retained earnings is the amount of earnings collected or accumulated over the period of time.…
Q: A company wants to pay a bonus to an employee so that the net pay is $10,000. The federal income tax…
A: Federal income tax, State income tax and FICA tax are to be deducted from the bonus paid. We…
Q: E10-6 Kelm Company purchased a new machineon October 1,2008, at a cost of $120.000. the Company…
A:
Q: On July 1, 2019, Cyclic Inc issued $1,000,000 in principal of 6% bonds due in July 2024. The bond…
A: Bond :— It is one of the source of capital which gives fixed rate of interest and maturity value at…
Q: Under the indirect method to prepare the statement of cash flows, a decrease in a current asset…
A: Cash Flow from operating activities :— It is the flow of cash & cash equivalents related to…
Q: Which one of the following is true? O The change in cash position is a linear relationship to…
A: There is no direct relation with growth sales and inventory level if production rates are compared…
Q: True or False Lease payments are paid by the lessor.
A: Lessor is the legal owner of the property.Lessor leases the property he owns to lessee for rental…
Q: If a bond is retired before maturity, the journal entry to record the retirement by the issuer will…
A: Organization can raise finance either through equity or debt.Since Bond being a debt issued to raise…
Q: A 1 Standard Cost Card- Toy Robot 2 3 4 Direct labour 5 Production overhead 6 Standard contribution…
A: Variance are the differences between the actual and the budgeted costs. It can be classified into…
Q: If you were only allowed one, which of the five statements would you select to determine whether or…
A: Income statement are prepared for assessing a company's financial performance over the specific…
Q: part 6 7 8 Question 6.1…
A: Introduction: Cost allocation refers to the process of identifying, collecting, and assigning costs…
Q: Why is it important to have internal controls in managing and handling cash? What internal controls…
A: Cash controls can be done by managing the cash policies and procedures. By maintaining the systems…
Q: a. What are the techniques that are commonly used in Management accounting?
A: Management Accounting :— Management Accounting are also known as cost accounting of Management…
Q: The 7-year $1,000 par bonds of Vail Inc. pay 9% interest. The market’s required yield to maturity on…
A: Bond :— Bond are Debt instruments and represent Loans Make to the issuer. government and Corporate…
Q: Calculate the due date, interest due, and maturity value of the following notes:…
A: The maturity amount of note is calculated as sum of principal value and interest revenue. Maturity…
Q: Pina Furniture Ltd. uses a perpetual inventory system and has a beginning inventory, as at June 1,…
A: The cost of goods sold refers to the cost of making the number of goods sold by an entity. But, it…
Q: n 2018, oil is discovered at Black, while Blue is abandoned. Grey has not reached a stage which…
A: Natural resources are the gift of nature. Without these resources, humans and animals cannot…
Q: Community Assist for Refugees (CAR) is a not-for-profit organization that assists refugees with…
A: In the deferral method, donations are received and revenues will only be recognized if the money is…
Q: Kross company purchases an equity investment in Penno Company at a purchase price of 5,000,000…
A: Equity Method of Accounting: Companies typically utilise the equity method of accounting to…
Q: Question 2 Product X passes through 2 process to completion. In period 2, the cost of production was…
A: Process Account :— It is used for calculating requirement of cost on specific process. It is made in…
Q: Business Solutions's second-quarter 2022 fixed budget performance report for its computer furniture…
A: Flexible budget is the statement which is prepared by an entity to budget the revenues and expenses.…
Q: The standard number of hours that should have been worked for the output attained is 9,000 direct…
A: The variance is the difference between the actual data and standard output of the production.…
Q: Swifty Department Store uses a perpetual inventory system. Data for product E2-D2 include the…
A: The inventory can be valued using various methods as FIFO, LIFO and average method. Using FIFO…
Q: You establish a straddle on Walmart using September call and put options with a strike price of $97.…
A: A straddle is an options strategy in which investors/traders buy the call & put option with the…
Q: ZARA uses a First-In-First-Out (FIFO) perpetual inventory system and has the following purchases and…
A: FIFO stands for First In and First Out. Using FIFO method, the goods that were purchased first are…
Q: Black Limited sells inventory to its parent, White Limited at cost price plus 125% mark-up. •…
A: 1.1 Where the group entity sells the goods to another, the selling entity as a separate legal…
Q: Skinner Corp. required additional cash for its operation and used its accounts receivable to raise…
A: "Since you have posted a question with multiple subparts, we will solve the first three subparts for…
Q: How does a price list get assigned to a sales order?a. It is copied from the business partner master…
A: Sales order refers to the document that is prepared by the seller and given to the customer. It is…
Q: Share dividends OA. have no effect on total shareholders' equity OB. are distributions of cash to…
A: Lets understand the basics. Common stockholders invested in stock in order to gain soeme return on…
Q: Bluestone Company had three intangible assets at the end of the current year: A patent purchased…
A: Intangible Assets According to IAS 38 which specifies the standards for identifying and valuing…
Q: Luther Corporation Consolidated Income Statement Year ended December 31 (in $ millions) 2012 610.1…
A: Price — Earning Ratio (P/E) :— It is the ratio of market price per share and earnings per share.…
Q: Archer's margin of safety percentage (MoS %) %.
A:
Q: From the following balances of Maryam Plc., as at 31.12.18 a) Format Motor vehicles (cost)…
A: In the context of the given question, we should prepare and present the financial statements.…
Q: How could Pascal and Super Tech have identified and addressed this risk? What should Pascal do now?…
A: Introduction: In this case, the organization should implement a risk-reduction strategy. The…
Q: What modifications are made to the cost classification of product costs in estimating service costs?
A: Cost classification refers to the separation of various expenses into different categories. It is…
Q: thilaire Corporation is working on its direct labor budget for the next two months. Each unit of…
A: Answer : Total Direct Labor Cost = Direct Labor cost per hour * Total direct labor hours paid
Step by step
Solved in 2 steps with 2 images
- 3. The following information is given with respect to stock A: Scenario Probability Market return 1 0.1 -0.18 2 0.3 0.07 3 0.4 0.16 4 0.2 0.21 Knowing that the Rfis 0.07 compute alpha and the information ratio. Portfolio P return -0.32 0.00 0.22 0.40a) The covariance between stocks A and B is 0.0014, standard deviation of stock A is 0.032, and standard deviation of stock B is 0.044. Which of the following is the most appropriate to depict the risk- return characteristics of a portfolio consisting of only stocks A and B, and explain why? E(R) E(R) E(R) A A A (A) (B) (C) b) found to be half of the required return (Rs) on stock B. The risk-free rate (R) is one-fourth of the required Assume that using the Security Market Line (SML) the required rate of return (RA) on stock A is return on A. Return on market portfolio is denoted by RM. Find the ratio of beta of A (DA) to beta of B (OB). c) Assume that the short-term risk-free rate is 3%, the market index S&P500 is expected to pay returns of 15% with the standard deviation equal to 20%. Asset A pays on average 5%, has standard deviation equal to 20% and is NOT correlated with the S&P500. Asset B pays on average 8%, also has standard deviation equal to 20% and has correlation of 0.5 with…1. Beta is positively related A. the degree of correlation between a stock's return and the market return B. the systematic risk of a stock C. risk premium required by the stock D. all of the above
- b) The covariance between stocks A and B is 0.0014, standard deviation of stock A is 0.032, and standard deviation of stock B is 0.044. Which of the following is the most appropriate to depict the risk-return characteristics of a portfolio consisting of only stocks A and B, and explain why. E(R) E(R) E(R) (A) (B) (C)K (Expected rate of return and risk) Syntex, Inc. is considering an investment in one of two common stocks. Given the information that follows, which investment is better, based on the risk (as measured by the standard deviation) and return? Common Stock A Probability 0.20 0.60 0.20 Common Stock B Return 13% 17% 18% Probability 0.10 0.40 0.40 0.10 (Click on the icon in order to copy its contents into a spreadsheet.) Return -7% 5% 16% 21% www a. Given the information in the table, the expected rate of return for stock A is 16.40 %. (Round to two decimal places.) The standard deviation of stock A is 1.74 %. (Round to two decimal places.) b. The expected rate of return for stock B is 9.8 %. (Round to two decimal places.) The standard deviation for stock B is 6.12 %. (Round to two decimal places.)(Expected rate of return and risk) Syntex, Inc. is considering an investment in one of two common stocks. Given the information that follows, which investment is better, based on the risk (as measured by the standard deviation) and return? Common Stock A Probability 0.25 0,50 0.25 Probability 0.10 0.40 0.40 0.10 (Click on the icon in order to copy its contents into a apreadsheet) Common Stock B Return 10% 17% 18% Return -4% 7% 13% 20% G a. Given the information in the table, the expected rate of return for stock A is 15.5% (Round to two decimal places) The standard deviation of stock A is (Round to two decimal places.)
- When working with the CAPM, which of the following factors can be determined with the most precision? a. The beta coefficient of "the market," which is the same as the beta of an average stock. b. The beta coefficient, bi, of a relatively safe stock. c. The market risk premium (RPM). d. The most appropriate risk-free rate, rRF. e. The expected rate of return on the market, rM.1. Risk free rate represents: a. The market rate of return b. The rate provided by long term government securities c. Beta d. The rate provided by short term government securities 2. The market risk premium is measured by: a. T-bill rate. b. market return less risk-free rate. c. beta. d. standard deviation. 3. A stock with a beta of one would be expected to have a rate of return equal to a. the market risk premium b. the risk-free rate c. the market rate of return d. zero(Expected rate of return and risk) Syntex, Inc. is considering an investment in one of two common stocks. Given the information that follows, which investment is better, based on the risk (as measured by the standard deviation) and return? Common Stock A Probability 0.20 0.60 0.20 Probability 0.15 0.35 0.35 0.15 (Click on the icon in order to copy its contents into a spreadsheet.) Common Stock B Return 13% 14% 18% Return - 6% 7% 15% 21% a. Given the information in the table, the expected rate of return for stock A is 14.6 %. (Round to two decimal places.) The standard deviation of stock A is %. (Round to two decimal places.)
- The table below contains the covariance matrix of stock returns and the market. Assume that the assumptions of CAPM hold. 1. Find the market risk. 2. Find the systematic risk of BlueChip.You are comparing Stock A to Stock B. Given the following information, what is the difference in the expected returns of these two securities? State of Economy Probability of State of Economy Rate of Return if State Occurs Stock A Stock B Normal .75 .13 .16 Recession .25 −.05 −.21Please assist with the below: Covariance with MPCorrelation with Market IndexBetaCAPM Req. ReturnValuation(Overvalued/Undervalued/Fairly Valued)Nature of stock(Aggressive/Defensive)