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NEW QUESTION: 1
Cavanaugh Inc. has a beta of 1.2. Next year you project the market will earn 12% and the risk free rate will be 5%. If you buy Cavanaugh you project your return will be 13%. Thus you think:
A. Cavanaugh's performance has nothing to do with the market return.
B. Cavanaugh will underperformed the market on a risk-adjusted basis.
C. Cavanaugh's performance will just matched the market return on a risk-adjusted basis.
D. Cavanaugh will outperform the market on a risk-adjusted basis.
Answer: B
Explanation:
Explanation/Reference:
Explanation:
Rs = Rf + B(Rm - Rf)Rs = .05 + 1.2(.12-.05)Rs = .134 or 13.4%You project Cavanaugh will out perform the market.
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A. data points plotted in the order in which they occur
B. most common cause of problems in a process
C. frequency of occurrence
D. relationship between two variables
Answer: A
NEW QUESTION: 3
Which one of the following contains information that is passed to service transition to enable the implementation of a new service?
A. A service option
B. A service transition package (STP)
C. A service design package (SDP)
D. A service charter
Answer: C
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