Within CAPM (the capital asset pricing model)... Select one: A. the risk-free ra

Question

Within CAPM (the capital asset pricing model)... Select one: A. the risk-free rate is usually higher than the return in the market. B. the higher the beta the lower the required rate of return. C. beta measures the volatility of an individual stock relative to a stock market index. D. two of the above are true.
Which of the following securities represents an unsecured promissory note issued by a corporation? Select one: A. Certificates of deposit B. Savings accounts C. Commercial paper D. Money market fund
A vendor offers you trade credit of 2/10, net 60. The value of the discount is the equivalent of ________%. Select one: A. 12% B. 15% C. 21% D. 32% Within CAPM (the capital asset pricing model)... Select one: A. the risk-free rate is usually higher than the return in the market. B. the higher the beta the lower the required rate of return. C. beta measures the volatility of an individual stock relative to a stock market index. D. two of the above are true.
Which of the following securities represents an unsecured promissory note issued by a corporation? Select one: A. Certificates of deposit B. Savings accounts C. Commercial paper D. Money market fund
A vendor offers you trade credit of 2/10, net 60. The value of the discount is the equivalent of ________%. Select one: A. 12% B. 15% C. 21% D. 32% Select one: A. the risk-free rate is usually higher than the return in the market. B. the higher the beta the lower the required rate of return. C. beta measures the volatility of an individual stock relative to a stock market index. D. two of the above are true.
Which of the following securities represents an unsecured promissory note issued by a corporation? Select one: A. Certificates of deposit B. Savings accounts C. Commercial paper D. Money market fund
A vendor offers you trade credit of 2/10, net 60. The value of the discount is the equivalent of ________%. Select one: A. 12% B. 15% C. 21% D. 32% A. the risk-free rate is usually higher than the return in the market. B. the higher the beta the lower the required rate of return. C. beta measures the volatility of an individual stock relative to a stock market index. D. two of the above are true.
Which of the following securities represents an unsecured promissory note issued by a corporation? Select one: A. Certificates of deposit B. Savings accounts C. Commercial paper D. Money market fund
A vendor offers you trade credit of 2/10, net 60. The value of the discount is the equivalent of ________%. Select one: A. 12% B. 15% C. 21% D. 32% Select one: A. Certificates of deposit B. Savings accounts C. Commercial paper D. Money market fund
A vendor offers you trade credit of 2/10, net 60. The value of the discount is the equivalent of ________%. Select one: A. 12% B. 15% C. 21% D. 32% Select one: A. Certificates of deposit B. Savings accounts C. Commercial paper D. Money market fund
A vendor offers you trade credit of 2/10, net 60. The value of the discount is the equivalent of ________%. Select one: A. 12% B. 15% C. 21% D. 32% A. Certificates of deposit B. Savings accounts C. Commercial paper D. Money market fund
A vendor offers you trade credit of 2/10, net 60. The value of the discount is the equivalent of ________%. Select one: A. 12% B. 15% C. 21% D. 32% A vendor offers you trade credit of 2/10, net 60. The value of the discount is the equivalent of ________%. Select one: A. 12% B. 15% C. 21% D. 32% Select one: A. 12% B. 15% C. 21% D. 32% A. 12% B. 15% C. 21% D. 32%

Explanation / Answer

1) Beta measures te volatility of the share in the market and the risk associated with it.

Option (c) is correct.

2) Commercial paper is an unsecured promissory note issued by any corporation.

Option (c)

3) Net credit of 2/10, net 60 = getting 2 dollars off per hundred dollar if the balance is paid in 10 days.

Thus, we lose 2$ for each delay of 50 days,

Discount %/(1-Discount %) x (360/(Full allowed payment days - Discount days)) = effective rate

Thus, discount = 2/98 * (360/50) = 14.7%

i.e close to 15%.

Option (b)

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