Author Question: How do interest rates affect the optimal order quantity Q? A) As interest rates increase, Q ... (Read 270 times)

daltonest1984

  • Hero Member
  • *****
  • Posts: 536
How do interest rates affect the optimal order quantity Q?
 
  A) As interest rates increase, Q increases until it reaches a maximum, after which any further
  increase in interest causes a decline in Q.
  B) As interest rates decrease, Q decreases.
  C) As interest rates increase, Q decreases.
  D) None of the above

Question 2

Assume the following information about the market and JumpMasters' stock. JumpMasters' beta = 1.50, the risk-free rate is 3.50, the market risk premium is 10.0. Using the SML, what is the expected return for JumpMasters' stock?
 
  A) 7.50
  B) 13.50
  C) 18.50
  D) 27.00



gasdhashg

  • Sr. Member
  • ****
  • Posts: 335
Answer to Question 1

C

Answer to Question 2

Answer: C
Explanation: C) The equation for the SML is E(ri) = rf + (rf + E(rm) - rf  i)
= 3.50 + 1.50  (13.50 - 3.50) = 18.50.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

More than 4.4billion prescriptions were dispensed within the United States in 2016.

Did you know?

According to the National Institute of Environmental Health Sciences, lung disease is the third leading killer in the United States, responsible for one in seven deaths. It is the leading cause of death among infants under the age of one year.

Did you know?

The strongest synthetic topical retinoid drug available, tazarotene, is used to treat sun-damaged skin, acne, and psoriasis.

Did you know?

The most common treatment options for addiction include psychotherapy, support groups, and individual counseling.

Did you know?

The lipid bilayer is made of phospholipids. They are arranged in a double layer because one of their ends is attracted to water while the other is repelled by water.

For a complete list of videos, visit our video library