Question

In: Finance

AT&T’s reported Beta is .44 while Verizon’s Beta is .57. This means: AT&T is more volatile...

AT&T’s reported Beta is .44 while Verizon’s Beta is .57. This means:

AT&T is more volatile than Verizon

AT&T and Verizon are less volatile than the market overall.

Verizon may be slightly more volatile than the overall market

None of these

If I bought 100 shares of Apple at $250 per share and sold them one year later at $310 per share, what is my total capital gain?

$6,000

25%

$60

None of these

note:if you are not 100% sure please don't give answers.

Solutions

Expert Solution

AT&T’s reported Beta is .44 while Verizon’s Beta is .57. This means:

AT&T and Verizon are less volatile than the market overall.

Option B is correct

The beta of market is 1. Both AT&T and Verizon have a beta of less than 1, which implies that their volatility is less than the volatility of the market.

Option A is incorrect because Verizon is more volatile than AT&T because Verizon's beta is higher than that of AT&T.

Option C is incorrect because Verizon is less volatile than the market because its beta is lower than 1.

If I bought 100 shares of Apple at $250 per share and sold them one year later at $310 per share, what is my total capital gain?

Capital gain = (Selling price - Purchase price) * Number of shares

Capital gain = (310 - 250) * 100

Capital gain = $6,000 (Option A is correct and C is incorrect)

Capital gain = (Selling price/Purchase price) - 1

Capital gain = (310/250) - 1

Capital gain = 0.24

Capital gain = 24% (Option B is incorrect)


Related Solutions

A t ratio compares two means and the ANOVA compares more than two means. Why is...
A t ratio compares two means and the ANOVA compares more than two means. Why is ANOVA used rather than a series of t tests? It holds type I error at a constant level It increases Type I error It is too much work to do a series of t tests Both methods provide the same information
What do you believe means more to fans, winning the championship once in a while or...
What do you believe means more to fans, winning the championship once in a while or being competitive every year?
Those strange gamma/delta T cells differ from the more typical and common alpha/beta T cells in...
Those strange gamma/delta T cells differ from the more typical and common alpha/beta T cells in which ways (circle all that apply): -They are the more common type of T cell receptor in adults -They do not need the CD3 chains to interact with their TCRs -They may occur earlier in fetal development than alpha/beta T cells -They always express high levels of CD4 and CD8, even when mature
T/F We would generally find that the beta of a single security is more stable over...
T/F We would generally find that the beta of a single security is more stable over time than the beta of a diversified portfolio. If an investor buys enough stocks, he or she can, through diversification, eliminate all of the market risk inherent in owning stocks, but as a general rule, it will not be possible to eliminate all diversifiable risk. A firm can change its beta through managerial decisions, including capital budgeting and capital structure decisions. Any change in...
2) Those strange gamma/delta T cells differ from the more typical and common alpha/beta T cells...
2) Those strange gamma/delta T cells differ from the more typical and common alpha/beta T cells in which ways (circle all that apply): -They are the more common type of T cell receptor in adults -They do not need the CD3 chains to interact with their TCRs -They may occur earlier in fetal development than alpha/beta T cells -They always express high levels of CD4 and CD8, even when mature
Why are developing T cells so much more likely to successfully recombine TCR beta chain genes...
Why are developing T cells so much more likely to successfully recombine TCR beta chain genes than B cells combine Heavy chain genes?
10) Why are developing T cells so much more likely to successfully recombine TCR beta chain...
10) Why are developing T cells so much more likely to successfully recombine TCR beta chain genes than B cells combine Heavy chain genes?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT