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NEW QUESTION: 1
Turi Teigen, CFA candidate, prepares the following question for her weekly Level 1 study program.
Using the graph (along with the list of assumptions), determine which of the following statements is CORRECT.
A. The expected return on Portfolio Z is greater than the required return.
B. The expected return on Portfolio Y could be 15.00%.
C. Portfolio X is overvalued.
D. The required return on Portfolio X is 10.25%.
Answer: D
Explanation:
Explanation/Reference:
Explanation:
Note: RR = required return, ER = expected return.Remember that the SML graph plots systematic, or beta, risk versus expected return. Thus, the numbers on the x-axis represent beta. Using the Capital Asset Pricing Model (CAPM) equation, RR = Rf+ (ERM- Rf) * Beta = 5.0% + (7.5%) * 0.7 = 10.25%.
Portfolio Y lies below the SML and is thus overvalued and the expected return must be less than the required return. Using the CAPM, RR = Rf+ (ERM- Rf) * Beta = 5.0% + (7.5%) * 1.0 = 12.50%. (On the exam, you can quickly determine the RR for a portfolio/asset with a beta of 1.0 by adding the risk-free rate and the market premium.) Since the ER must be less than the RR, the ER must be less than 12.50% and cannot be 15.00%. Since Portfolio Z is on the SML, it is fairly valued and RR = ER. Since Portfolio X lies above the SML, it isundervalued.

NEW QUESTION: 2
At December 31, Year 1, an entity has the following account balances:

The preference shares are cumulative and nonparticipating and have a call price of US $55 per share. The journal entry to record the redemption of all preferences shares on January
2. Year 2, pursuant to the call provision is

A. Option D
B. Option B
C. Option A
D. Option C
Answer: A
Explanation:
The exercise of the call provision resulted in the redemption of the 10.000 preference shares issued and outstanding at the call price of US 8550.00010.000 shares $55 call price per share). To eliminate the carrying amount of the preference shares and recognize the cash paid in this transaction, the required journal entry is to debit preference shares for US $500.000. debit share premium: preference for US $20.000, and credit cash for US $550.000. The difference of US $30.000$550.000 cash - $520,000 carrying amount of the preference shares) is charged to equity debit retained earnings). No loss is reported because the recognition of a gain or loss on transactions involving an entity's own shares is prohibited.

NEW QUESTION: 3
The following image includes Android code for an app that contains a button with an id : "Downloadbutton".
When the app user clicks this button, a progress bar with id: "progressBar" will show up. What will happen if you change *'rate+=10" illustrated with green underlined text to "rate+=50"?

A. No any change m progress bar work.
B. The progress bar will finish within two steps only.
C. The progress bar will work before slowly than before.
D. You will get error and the app will not work.
Answer: B