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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A company makes $1 million in after-tax profits for the year. It spends the entire amount on new equipment. Which of the following is true?
a) Its leverage ratio at the end of the year is higher than it was one year before b) Its retained earnings for the year equal zero. c) Its book value at the end of the year is $1 million greater than that of one year before. d) Its book value at the end of the year is the same as that of one year before.
Which of the following is NOT one of the six key factors that influence an organization's working environment?
a. Flexibility b. Responsibility c. Standards d. Power e. Clarity