--%>

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 : Maintaining the fixed exchange rate

    Explain why “Once  the capital markets are integrated, it becomes difficult for the country in order to maintain the fixed exchange rate”. 

  • 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?

  • Q : Essay-People Dependent on technology

    PEOPLE DEPENDENT ON TECHNOLOGY TOO MUCH: Science has developed tremendously in past few years and with the development of science many technologies have entered this world. Today everything is being done with the h

  • Q : Economic exposure How economic exposure

    How economic exposure can be defined in order to exchange the risk?

  • Q : Commercial bank problems Select the

    Select the right answer of the question. Assume that, for every 1-percentage point decline of the discount rate, commercial banks collectively borrow an additional $2 billion from Federal Reserve banks. Also suppose that reserve ratio is 20 percent. If the Fed incre

  • Q : Essay topics related to Religion I have

    I have some problem related to Essay topics which are related to Religion which are illustrated below: Topic A:What are the qualities of the ‘perfect&rsq

  • Q : Review the accounting cycle the

    Assignment: The purpose of this assignment is to review the accounting cycle--the procedures that businesses normally use to record transactions during the year and prepare financial statements at the end of the year.  The accounting cycle is discussed in Chapter 3 of your textbook. &nb

  • Q : Comprehensive Project Please help me in

    Please help me in solving this requirement

  • Q : Characteristics of Composite currency

    State the characteristics of the Composite currency bonds market instrument.

  • Q : Advanced Accounting-Consolidated

    I have worked the problem. I need to know if it is correct. If not, what I'm missing.