--%>

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 : Discuss to what extent does risk and

    to what extent does risk and term structure affects interest rates of financial instruments.

  • Q : Demerits of implementing Uniform Costing

    Write down the demerits of implementing Uniform Costing?

  • Q : Identification of Responsibility Centre

    Identification of Responsibility Centre: Profit centre has been taken as the responsibility centre. Profit centre is the one in which both the revenue and costs are accounted for. The difference between them is the profit so the managers for this cent

  • Q : NPV capital budgeting framework Specify

    Specify intuition behind NPV capital budgeting framework?

  • Q : Project Advantages-disadvantages of

    Advantages-disadvantages of internal rate of return method

  • Q : Increase the return without any

    Suppose that treasurer of IBM has an extra cash reserve of $1,000,000 to invest for the six months. Six-month interest rate is 8% per annum in U.S. and 6% per annum in the Germany. Presently, spot exchange rate is DM1.60 per dollar and six-month forward exchange rate

  • Q : Techniques of valuation of goodwill

    Techniques of valuation of goodwill: A) Average profit technique B) Super profit technique C) Capitalization technique

  • Q : Calculation of NPV Calculation of NPV:

    Calculation of NPV: Calculation of NPV is done through the same method of discounting as described above. However in this case the rate is predefined for  discounting. It is the cost of overall long term resources, whether debt or equity. This co

  • Q : Matlab Applications in Communication

    Communication system is the discipline in engineering curriculum which is more of the conceptual rather than theoretical. Mainly student faces trouble in understanding the core concepts of this topic. We have team of highly competent and prac

  • Q : Explain Agricultural business Explain

    Explain the term Agricultural business in term of Accounting?