Stock A has a beta of 0.8 and Stock B has a beta of 1.2. 50% of Portfolio P is invested in Stock A and 50% is invested in Stock B. If the market risk premium (rM? rRF) were to increase but the risk-free rate (rRF) remained constant, which of the following would occur?
A. The required return would decrease by the same amount for both Stock A and Stock B.
B. The required return would increase for Stock A but decrease for Stock B.
C. The required return on Portfolio P would remain unchanged.
D. The required return would increase for Stock B but decrease for Stock A.
E. The required return would increase for both stocks but the increase would be greater for Stock B than for Stock A.
Answer: E
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a. $1,000 b. $882 c. $980 d. $900
What construct helps explain how stereotypes outside of the workplace couple with conditions inside the workplace can influence employee performance?
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Answer the following statement true (T) or false (F)
Echo Air Company (EAC)Echo Air Co. is a well-known establishment in the airline business. It is currently one of the top firms in the industry. The company prides itself on good customer service and being concerned with the broader societal good. EAC management is not only concerned with doing things right, but also with doing the right things. Many of their decisions reflect this philosophy. Initially, the company had a problem with employees reporting their suspicions about unethical behavior to the press instead of to EAC management. As a result, the company made sure its employees knew the firm's guidelines on fixing ethical issues. EAC also developed a code of conduct based on standards that continue to be upheld within the company. Since the code of conduct has been put in place,
there have been fewer ethical violations.Although employee salaries at EAC are not as high as those at competing firms, the company experiences very low employee turnover. The firm has created a corporate culture that not only makes its employees want to stay, but that also results in higher profits. If EAC can maintain the relationship it has built with its employees and customers, it will have little difficulty keeping up its remarkable success. ? Refer to Echo Air Company. To fix the ethical issue problems, EAC management should have implemented all of the following guidelines for making ethical decisions except which one? A. Listen and learn. B. Identify the ethical issue. C. Create and analyze options. D. Create an industry benchmark. E. Explain your decision and resolve any differences that arise.