Explain the concept of behavioral finance

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1. You are hedging a £10,000 receivable using a currency collar that has a range from $1.90/£ to $2.50/£. On the day of payment, the exchange rate is $2.55/£. How much dollars will you receive?

2. Assume that the risk-free rate is 3% and the required return on the market is 11%. What is the required rate of return on a stock with a beta of 1.5? Round your answer to two decimal places.

3. Explain the concept of behavioral finance. How does relate to market efficiency?

Reference no: EM132045622

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