You hold a portfolio with the following securities:
Security
Percent of
Portfolio Beta
Expected
Return
Able Corporation 20% 3.20 36.0%
Baker Corporation 40% 1.60 20.0%
Charlie Corporation 40% .20 6.0%
What is the expected return for the market, according to the CAPM?
A) 12.0% B) 10.0% C) 14.0% D) 13.8%
C
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In which of the following stores would you be most likely to encounter a straight rack?
A. Ted's department store B. Fresh Ones, a florist C. Dailies supermarkets D. Dream Toys E. Jenny's Hair Salon
Given the failure rate of a component, we can calculate MTBF as ______.
A. the range of the failure rate across many tested components B. the standard deviation of the failure rate across many tested components C. the square of the failure rate D. the reciprocal of the failure rate
Two firms-Tangerine Inc. and Cyan Inc. analyze the same project for capital budgeting decision. Tangerine Inc. determines that the project's internal rate of return (IRR) is 9 percent. Cyan Inc. uses the net present value (NPV) method and determines that the project is unacceptable. Given this information, which of the following statements is correct??
A. ?The net present value of the project must be positive for both the firms. B. ?Cyan Inc.'s internal rate of return (IRR) from the project is less than 9 percent. C. ?Tangerine's CFO should use the traditional payback period method to evaluate the project. D. ?Tangerine Inc. should use a discount rate of more than 9 percent for capital budgeting analysis by the net present value (NPV) method. E. ?Cyan Inc.'s required rate of return is greater than 9 percent.
A shareholder lends money to his corporation in his capacity as an investor. If the loans become worthless, a business bad debt results.
Answer the following statement true (T) or false (F)