The required return on equity for an individual stock includes which of the following?
A) systemic risk
B) idiosyncratic risk
C) risk-free interest rate
D) all of the above
D
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Explain how the listed events (a-d) would affect the following at Hilton Hotels
i. Marginal cost ii. Average variable cost iii. Average fixed cost iv. Average total cost a. Hilton decides on an across-the-board 5 percent increase in executive salaries. b. Hilton decides to eliminate all print advertising. c. Hilton signs a new contract with the Culinary Workers Union that requires the company to increase wages for all its kitchen workers. d. The federal government starts to levy a $5 room tax on all hotel rooms.
Mean reversion refers to the fact that
A) small firms have higher than average returns. B) stocks that have had low returns in the past are more likely to do well in the future. C) stock returns are high during the month of January. D) stock prices fluctuate more than is justified by fundamentals.
Unemployment insurance and welfare programs work as automatic stabilizers
a. True b. False Indicate whether the statement is true or false
The price (P) of a consol offering an annual coupon payment (C) is best expressed by:
A. C/i B. C/(1+ i) C. C(1 + i) D. F/C