--%>

Non-tradable asset

Assume there is non-tradable asset along with the perfect positive correlation with a portfolio T of the tradable assets.  How will non-tradable asset be priced?

E

Expert

Verified

Non-tradable asset along with perfect positive correlation with the portfolio T (for tradable) will be priced as if it were tradable itself. Or we can state that it will be priced in accordance with its world systematic risk.

   Related Questions in Financial Accounting

  • Q : Benefits of investing through

    List the benefits of investing through the international mutual funds?

  • Q : Calculation Of IRR Calculation Of IRR :

    Calculation Of IRR: IRR is the rate at which your discounted cash inflow becomes equal to your discounted cash outflow. In other words NPV=0. To determine this following steps are followed:- 1. Determine cash inflo

  • Q : Relationship-To Look for in each other

    What is Relationship and what are the traits that make any relationship happy and committed forever ?

  • Q : Controlling the translation exposure It

    It is, normally, not possible to fully remove both the translation exposure and transaction exposure.  In some cases, eradication of one exposure will also eliminate the other.  However in other cases, removal of one exposure really creates the other. 

  • Q : Investors investing within the lion’s

    Explain why do investors invest within the lion’s share of their funds within the domestic securities?

  • Q : Prepare journal entry to record

    On December 31, 20x1, the Juniper Company purchase a group of four assets for a total cost of $850,000. An independent appraiser assesses the fair value of each asset as follows: Asset Fair Value Land $100,000 Building 600,000 Equipment 250

  • Q : What is Corporate Social Responsibility

    Corporate Social Responsibility directly states that every company is responsible towards the society and the environment. So this is a duty of every company to create eco-friendly new products. In the current scenario when the fuel prices are increas

  • Q : Balance Sheets & Income Statement

    Bio-Pure Food Company Gary Green has recently inherited some money and is interested in investing in a small company with some growth potential.  Last week he r

  • Q : French Association of Private Companies

    In the year 1995, working group of the French chief executive officers was formed by the Confederation of French Industry (CNPF) and the French Association of Private Companies (AFEP) for studying the structure of the French corporate governance. Group has reported th

  • Q : Difference between the periodic and

    What is the main difference between the periodic and perpetual process, how will you record it in your note-book?