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Risk and return
Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.
Capital Asset Pricing Model
Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.
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- A customer takes out a loan of $130,000 on January 1, with a maturity date of 36 months, and an annual interest rate of 11%. If 6 months have passed since note establishment, what would be the recorded interest figure at that time? A. $7,150 B. $65,000 C. $14,300 D. $2,383For ethe case shown in the following table, determine the amount of the equal, end of year deposits necessary to accumulate the given sum at the end of the specified period, assuming the stated annual interest rate. Sum to be accumulated: $130,000 Accumulation Period (years): 30 Interest Rate: 13% The amount of the end of year annual deposit is? (round to the nearest cent)(5.2.4) An investor deposits 50 in an investment account on January 1. The fol- lowing summarizes the activity in the account during the year: Value Immediately Before Deposit Date Deposit March 15 40 20 June 1 80 80 October 1 175 75 On Jaune 30, the value of the account is 157.50. On December 31, the value of the account is X. Using the time-weighted method, the equivalent effective annual yield during the first 6 months is euqal to the (time-weighted) effective annual yield during the entire 1-year period. Calculate X.
- A deposit is made on January 1, 2004. The investment earns 6% simple interest. Calculate the monthly effective interest rate for the month of December 2004.What is the future value on December 31, Year 5, of a deposit of $10,000 made on January 1, Year 2, assuming interest of 16% compounded quarterly?On January 23 of a non-leap year, a loan is taken out for $15,230 at 8.8% simple interest. What is the maturity value of the loan on October 23?
- For the case shown in the following table, determine the amount of the equal, end of year deposits necesssary to accumulate the given sum at the end of teh specified period, assuming the stated annual interest rate. Sum to be accumulated Accumulation Period (Years) Interest Rate $124,600 20 11%Accounting for Current Liabilities A note payable is issued for a face value of $100,000. The interest is 8% and the note is for 12 months. What is the cash flow impact to the issuer at the maturity of the note payable?the difference between the future values of a deposit accumulated for 15years at a rate of 9.5% compounded per annum and the future value of same deposit over the same period at 7.75% compounded quarterly is 375. find tge deposit
- A bank customer borrows X at an annual effective rate of 12.5% and makes level payments at the end of each year for n years. (i) The interest portion of the final payment is 153.86. (ii) The total principal repaid as of time (n − 1) is 6009.12. (iii) The principal repaid in the first payment is Y. Calculate Y. OA. 500 OB. 470 O C. 480 O D. 490 OE. 510If the company accepted a Notes Receivable on Oct 1, X1 for $60,000 at 8%, due in one year, what is the Maturity value?The following information is given for a 60-month loan from a bank: Debt repayments are made at the end of each month.The annual effective interest rate for this loan is 12.682503%.The interest portion of the first installment is 300 TL. The remaining debt balance of this loan after the tenth payment is restructured with an annual effective interest rate of 11%. Calculate the new installment payments accordingly.