This should be correct in a perfect market. Not true usually as assets are often mis priced. Expected return is the return/discount that market is using to get the value of the asset while required return is the discount / return that gets you the true intrinsic value of an asset
yes
under NET ASSET VALUE method all the ASSETS-LIABILITIES we need to calculate
Total asset turnover ratio = total sales / total assets
Return on Assets = Profit Margin X Asset Turnover
Return on asset= profit margin × asset turnover Return on equity= return on asset × equity multiplier so, return on equity is more comprehensive
Security A is less risky if held in a diversified portfolio because of its negative correlation with other stocks. In a single-asset portfolio, Security A would be more risky because sA> sBand CVA > CVB.
.5
This should be correct in a perfect market. Not true usually as assets are often mis priced. Expected return is the return/discount that market is using to get the value of the asset while required return is the discount / return that gets you the true intrinsic value of an asset
Return on asset = 1275 * 12% Return on asset = 153
yes
the security market line
Imperfect Asset substitutability assumes that returns from two assets in different countries differ in equilibrium. The main reason is risk, i.e. If bonds denominated in different currencies have diverse degree of risk, investors will hold very risky assets if and only if the expected return is relatively high.
under NET ASSET VALUE method all the ASSETS-LIABILITIES we need to calculate
Return the asset
To calculate capital gains when selling an asset, subtract the purchase price from the selling price. This difference is the capital gain.
Excess Returns is the difference between what was gained on a risky investment, versus what one would have gained if they had not taken the risky investment and instead had invested in a risk-free investment. Any more they made taking the risk than they would have otherwise is considered to be a positive excess return.