If you expect the market to increase which of the following portfolios should you purchase? Select...

If you expect the market to increase which of the following portfolios should you purchase?
Select one:
a. a portfolio with a beta of 1.0
b. a portfolio with a beta of 0
c. a portfolio with a beta of -0.5
d. a portfolio with a beta of 1.9

he final step in the capital budgeting process is ______.
Select one:
a. decision making
b. implementation
c. review and analysis
d. follow-up

Please Solve As soon as
Thank's
Abdul-Rahim Taysir

Expert Solution

Beta reflects the potential of volatility of a stock in comparison to the market; The higher the beta factor, the higher the volatility and higher the risk factor as well as return probability. However, one need to guage these properly and from time - to - time to levage maximum returns.

A Beta of 1.0 indicates that the stock moves in line with the market. This is a safe zone which moves along with the market movement.

However, if there is a certaintity on the increase in the market, it is recommended for higher beta factor portfolio, which tends to delvier more returns as compared to the market returns; In this case, portfolio with beta 1.9 to be purchased.

Broadly, the below are the steps of Capital Budgeting Process:

1) identification of investment opportunities / options

2) Evaluation of projects using various techniques

3) Decision Making based on above factors

4) Implementation

5) Review and re-assessment using adjusting factors (like inflation, market changes, economic factors etc), which keep on changing on periodic basis.

The answer is "Review and Analysis".

jeff jeffy answered 2 years ago

QUESTION 19 Which of the following would you expect to increase the equilibrium interest rate? A....

QUESTION 19 Which of the following would you expect to increase the equilibrium interest rate? A. an increase in the percentage of income after net taxes that households save B. an increase in the budget deficit C. a decrease in the profitability of investment projects firms are considering D. a change from an income tax to a consumption tax 4 points QUESTION 20 The period of expansion ends with a ________ and the period of recession ends with a ________....

Select the reactions for which we should expect a delta S (entropy) to be >0. Can...

Select the reactions for which we should expect a delta S (entropy) to be >0. Can select more than one. CO2 (g) + 2H2 (g)-->CH3OH (l) 2SO2 (g) + O2 (g)--> 2SO3 (g) Ba(OH)2 (s)-->BaO (s)+ H2O (g) FeCl2 (s) + H2(g)-->Fe (s)+2HCl (g)

16. Which of the following would you expect to have the least market power? A. A...

16. Which of the following would you expect to have the least market power? A. A wheat farmer B. A gasoline station in a small rural town C. A small biotech company with a patent on a drug D. All of the above would have equal market power E. None of the above would have any market power 17. When a monopolist switches from charging the monopoly price to price discriminating, which of the following is/are true? A. producer surplus...

1. Which of the following assets would you expect to be the most liquid? a.Money market...

1. Which of the following assets would you expect to be the most liquid? a.Money market securities b. Long term debt c.Equity d. Preferred shares 2. Which of the following is a good reason to take a firm public? a. To reduce regulatory compliance costs b. To reduce the amount of information leaked to competitors c. To lower liquidity d. To increase the number of potential equity investors 3. If you believe in the strong form efficient market hypothesis, which...

4. Which of the following responses would an economist expect to result from an increase in...

4. Which of the following responses would an economist expect to result from an increase in interest rates? (x) Thelma puts less money into savings accounts and bonds because a higher interest rate scares her since it is always an indication that the assets are more risky. (y) Since the interest expense on any given loan increases as the interest rate increases, Beatrice decides to purchase a smaller home than she had initially planned because her monthly income is fixed....

Which of the following actions will increase bank lending? Instructions: You may select more than...

Which of the following actions will increase bank lending? Instructions: You may select more than one answer. Click the box with a check mark for correct answers and click to empty the box for the wrong answers. The Bank of Canada buys $400 million worth of bonds from chartered banks. The chartered banks raise the desired reserve ratio from 10 to 11 percent. The Bank of Canada lowers the bank rate from 4 to 2 percent. The Bank of...

1. Which of the following would cause an increase in the market supply of accountants (increase...

1. Which of the following would cause an increase in the market supply of accountants (increase labor supply curve) Select one: a. an increase in wages offered to tax attorneys (an occupation alternative to accounting) b. an increase the in value of the marginal product of accountants. c. a decrease in wages offered to tax attorneys (an occupation alternative to accounting) d. stricter qualifications needed to be a certified public accountant (CPA) 2. Value of the marginal product of labor...

Which of the following statements is correct? Select one: a. An increase in government spending in...

Which of the following statements is correct? Select one: a. An increase in government spending in a small open economy causes currency depreciation b. An increase in domestic taxes in a small open economy causes a decrease in the real interest rate c. An increase in taxes in a small open economy causes currency depreciation d. An increase in domestic physical capital in a small open economy causes an increase in the real interest rate.

Which of the following will increase the number of theoretical plates in a chromatographic separation? Select...

Which of the following will increase the number of theoretical plates in a chromatographic separation? Select all that are appropriate. decrease column packing particle size increase column mobile phase flow rate increase column length change mobile phase to one with a greater analyte diffusion coefficent

You are given the following information concerning three portfolios, the market portfolio, and the risk-free asset:...

You are given the following information concerning three portfolios, the market portfolio, and the risk-free asset: Portfolio RP σP βP X 12.5 % 38 % 1.45 Y 11.5 33 1.15 Z 9.4 23 0.80 Market 11.9 28 1.00 Risk-free 6.2 0 0 What are the Sharpe ratio, Treynor ratio, and Jensen’s alpha for each portfolio? (A negative value should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round...

Question