Portfolio AB has half of its funds invested in Stock A and half in Stock B. Portfolio ABC has one third of its funds invested in each of the three stocks. The risk-free rate is 5%, and the market is in equilibrium, so required returns equal expected returns. Which of the following statements is CORRECT?
a) Portfolio ABC's expected return is 10.66667%.
b) Portfolio AB has a standard deviation of 20%.
c) Portfolio ABC has a standard deviation of 20%.
d) Portfolio AB's required return is greater than the required return on Stock A.
e) Portfolio AB's coefficient of variation is greater than 2.0.

Answers

Answer 1

Answer:

a) Portfolio ABC's expected return is 10.66667%.

Explanation:

Some information is missing:

Stock                Expected         Standard             Beta

                         return              deviation

A                            10%                 20%                 1.0

B                            10%                  10%                 1.0

C                            12%                  12%                 1.4

The expected return or portfolio AB = (1/2 x 10%) + (1/2 x 10%) = 10% (it is the same as the required rate for stock A or B)

The expected return or portfolio ABC = (weight of stock A x expected return of stock A) +  (weight of stock B x expected return of stock B) + (weight of stock C x expected return of stock C) = (1/3 x 10%) + (1/3 x 10%) + (1/3 x 12%) = 3.333% + 3.333% + 4% = 10.667% THIS IS CORRECT

Options B, C, D and E are wrong.


Related Questions

The monopolist has total fixed costs of $40 and a constant marginal cost of $5. At the profit-maximizing level of output, the monopolist's profit is

Answers

Answer:

$8.

Explanation:

Calculation for the the monopolist's profit

Using this formula

Monopolist's profit =Fixed costs/Constant marginal cost

Let plug in the formula

Monopolist's profit=$40/$5

Monopolist's profit=$8

Therefore the Monopolist's profit will be $8

The monopolist's profit is the amount of earnings left by the monopolist by the business operations. In the context of economics, a monopoly is the type of firm that stands alone in the market and does not have any competitors for the same product.

The monopolist is like government entities such as railway services, life insurance services, and many more.

The monopolist's profit is $8.

Computation:

Given,

Fixed cost =$40

Constant marginal cost =$5

The given components will be simply used in the formula to determine the monopolists' profit.

[tex]\rm{Monopolist's\;profit}=\dfrac{Fixed\;cost}{Constant\;marginal\;cost}\\\\=\dfrac{\$40}{\$5}\\\\=\$8[/tex]

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An employee earns $5,750 per month working for an employer. The FICA tax rate for Social Security is 6.2% of the first $128,400 earned each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. The employee has $208 in federal income taxes withheld. The employee has voluntary deductions for health insurance of $176 and contributes $88 to a retirement plan each month. What is the amount of net pay for the employee for the month of January? a. $5,207.b. 53.c. $5,296.70.d. $5,158.32.e. $4,826.22.f. $4,875.42.

Answers

Answer:

Net Pay for the employee $5,238.125

Explanation:

The computation of the amount of net pay for the employee for the month of Jan is shown below:

Particulars                          Amount

Wages Per Month                $6,150

Less:

Federal Income Taxes Withheld -$208

FICA Social Security  -$356.50 ($5,750 × 6.2%)

FICA Medicare -$83.375 ($5,750 × 1.45%)

Health Insurance    -$176

Retirement Plan      -$88

Net Pay for the employee $5,238.125

This is the answer but the same is not mentioned in the given options.

True or false: When a capital investment decision is being made between two or more alternatives, the project with the shortest payback period is always the most desirable investment.

Answers

Answer:

False

Explanation:

The payback period refers to the specific period of time that it is required to recover the amount invested and it is an important factor to take into account but the project with the shortest payback period is not necessarily the most desirable investment because other factors are also considered, for example, the expected profit and the conditions in the environment that may affect the assumptions made. Because of that, the answer is that the statement is false.

The most important, most convenient, and most flexible way in which the Federal Reserve affects the supply of bank reserves is through:

Answers

The most important tool of monetary policy is open market operations

Answer: open market operations

Explanation:

Helen is considering adding a rack of greeting cards to her product offerings at Litton Books Unlimited. Her fixed costs associated with adding the greeting cards would be $300. Variable costs per card are $1 each. The greeting cards will sell for $2 each. Helen's break-even point would occur at ________ cards sold.

Answers

Answer:

the break even point is 300 cards sold

Explanation:

The computation of the break even point in units is shown below:

= Fixed cost incurred ÷ contribution margin per unit

= $300 ÷ ($2 - $1)

= $300 ÷ ($1)

= 300 cards sold

As we know that the contribution margin per unit is

= Selling price per unit - variable cost per unit

And, the same is to be followed

Hence, the break even point is 300 cards sold

Helen's break-even point would occur at 300 cards sold.

Break even point= Fixed cost  ÷ Contribution margin per unit

Where:

Fixed cost=$300

Contribution margin per unit=$2-$1

Let plug in the formula

Break even point= $300/($2-$1)

Break even point= $300/$1

Break even point= 300 cards

Inconclusion Helen's break-even point would occur at 300 cards sold.

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In most transactions, the buyer is accepting the condition of the property at what point in time:_________

a. At closing
b. At the signing of the contract
c. 30 days after closing
d. At the time of the first viewing

Answers

Answer:

b. At the signing of the contract

Explanation:

A contract can be defined as an agreement between two or more parties (group of people) which gives rise to a mutual legal obligation or enforceable by law.

Mutual assent is a legal term which represents an agreement by both parties to a contract. When two parties to a contract both have an understanding of the parameters, terms and conditions surrounding a contract, it ultimately implies that they are in agreement; this is generally referred to as mutual assent and it is at this point they (buyer and seller) sign the contract. Therefore, mutual assent connotes agreement, acceptance and consent to a contract by both parties.

Hence, in most transactions, the buyer is accepting the condition of the property at the signing of the contract as an approval or consent to the terms and conditions.

Stock in Daenerys Industries has a beta of 1.2. The market risk premium is 6 percent, and T-bills are currently yielding 4.9 percent. The company’s most recent dividend was $1.30 per share, and dividends are expected to grow at an annual rate of 8 percent indefinitely. If the stock sells for $36 per share, what is your best estimate of the company’s cost of equity?

Answers

Answer:

The best estimate of the company’s cost of equity is 12%

Explanation:

Estimate of the company’s cost of equity = (Required Return as per Capital Asset Pricing Model + Cost of Equity) / 2

Required Return as per Capital Asset Pricing Model = Risk Free rate + Market Risk Premium * Beta

= 4.9 % + ( 6% * 1.2)

= 0.049 + 0.06 * 1.2

= 0.049 + 0.072

= 0.1210

= 12.10%

Cost of Equity = (Expected Dividend/Price) + Growth Rate

= [( $ 1.30 * 1.08) / $ 36] + 8%

= 0.039 + 0.08

= 0.1190

= 11.90%

The best estimate of the company’s cost of equity = (12.10 % + 11.90 % )/ 2

=  24% / 2

= 12%

Hence, the best estimate of the company’s cost of equity is 12%

Asking all job candidates questions from the same interview schedule in the same way is an example of ________.

Answers

Complete Question:

Asking all job candidates questions from the same interview schedule in the same way is an example of ________.

Group of answer choices

A) validity

B) correlation

C) reliability

D) standardization

Answer:

D) Standardization.

Explanation:

Asking all job candidates questions from the same interview schedule in the same way is an example of standardization.

When recruiters use a standardization in the recruitment process, it involves the process of asking or assessment of all the potential employees using the same question, pattern or method.

Generally, a standardized job interview is assumed to be more objective and effective.

To develop _____ plans, managers identify important factors in the environment, such as possible economic downturns, declining markets, increases in cost of supplies, new technological developments, or safety accidents.

Answers

Answer: contingency

Explanation: Managers must identify important factors in the environment in order to develop contingency plans. Some of these factors that might affect the business or an organization as the case maybe would include possible economic downturns, declining markets, increases in cost of supplies, new technological developments, or safety accidents. Contingency plans are alternative plans to be put into operation if needed, especially in case of emergencies, or if a primary plan fails.

How does the concept of scarcity affect economic decision making?

Answers

Answer:

The ability to make decisions comes with a limited capacity. The scarcity state depletes this finite capacity of decision-making. ... The scarcity of money affects the decision to spend that money on the urgent needs while ignoring the other important things which comes with a burden of future cost.

explain the income method of calculating national income. assume that a farmer sells wheat to miller for rs. 15. the miller turns wheat into flour, which she sells to a baker for rs. 35. the baker turns the flour into bread and sells to consumer for rs. 60. calculate the gdp in this case? which method do you use to calculate gdp in this case? what precautions should be taken in that method?

Answers

Answer:

The income method calculates the GPD by adding all the income generated by each production stage included in the GDP.

In this case, using the income method:

Farmer                sells wheat             income = 15

Miller                   produces flour       income = 35 - 15 = 20

Baker                  makes bread          income = 60 - 35 = 25

total GDP                                            15 + 20 + 25 = 60

If you use the expenditures method, you just account for the price of bread = 60. Both methods should yield the same result.

When using the income method, you must be very careful with depreciation and foreign factors.

A single-phase queuing system in which each arriving customer will be served by a three-member crew has four crews with three members each. The number of "servers" is

Answers

Answer:

The number of "servers" is 12.

Explanation:

This is because, for a customer to be served by 1 3-member crew, it shows that, there a 3 servers. But, this crew of 3 servers is divided into 4 different group (4-crews), hence, the total number of servers = 12.

There are two main ways to measure social inequality, they are: Inequality of conditions refers to the unequal distribution of income, wealth, and material goods. Inequality of opportunities refers to the unequal distribution of life chances across individuals.

Answers

Answer:

True.

Explanation:

Social inequality can be defined as an existence of unequal rewards and opportunities for different social status or classes within a group of people in a society.

Generally, social inequality is peculiar to a society that is grouped based on race, hierarchy of class, religion, culture and gender. A social inequality is characterized by unequal distribution of wealth, punishment, rewards, opportunities and goods or services to the various classes.

There are two main ways to measure social inequality, they are:

1. Inequality of conditions: refers to the unequal distribution of income, wealth, and material goods.

2. Inequality of opportunities: refers to the unequal distribution of life chances across individuals.

you recently finished an essay on the milky way galaxy in google docs, but you can’t locate the file anywhere on your Google Drive. What should you do?

Answers

Answer:

Google docs

Explanation:

Have you checked your files on your google docs or if they aren't there try searching for them on your phone.

Answer:

In Google Drive, enter a keyword in the search bar and press Enter. A list of files and folders matching your keyword search appears.

Select a folder or any type of file. ...

You can also select a folder or a Google file, right-click and select Show file location

"An oil and gas sharing arrangement where the general partner agrees to defer taking a percentage of revenues until all costs are recovered is a(n):"

Answers

Answer:

The correct approach will be "Reversionary working interest".

Explanation:

Reversionary value or interest seems to be an individual's value in something like a community when a prior estate continues to function. It represents any curiosity that is deferred to something like the gratification of. Under reversive consideration, the obligation of a mortgagee to provide and inhabit land becomes susceptible to something like constraints imposed by the proprietor.

A diverse team will almost always have _____ than a homogeneous team. more extensive external contacts lesser cognitive resources more rigid standards narrower vision

Answers

Answer: more extensive external contacts

Explanation:

Team diversity has to do with the differences that the members of a particular team have. Such differences can be due to religion, nationality, age etc. .

It should be noted that diverse team will almost always have more extensive external contacts than a homogeneous team.

For a perfectly competitive market to function properly, which of the following must buyers and sellers have access to?

Sufficient technology

Uncompetitive products

Economies of scale

Adequate information

Answers

Answer:

Adequate information

Explanation:

Both the buyers and sellers must have access to adequate information. Information are both vital for both the buyers and sellers. For the buyer, it influences their decision making and buying choice. For the seller, it helps them to know the trending buyer need. Hence, for a perfectly competitive market to function well, the buyer and seller must have access to adequate information.

Among the most effective ways to increase sales of an online service is to offer some form of free trial for users to experiment with before they purchase the full service. The benefit of such a practice is to encourage sales in individuals who would not buy the product without having tried it first.
Which of the following is best supported by the information given above?
A. The number of people who see the free trial as an acceptable replacement for buying the online service is not greater than the number of people who buy the online service because of their experience within the free trial.
B. Because the cost of offering a free trial can be high, companies are often resistant to offering free trials, especially free trials that offer all features included within the paid version of the online service.
C. In calculating the total number of an online service sold, free trials are generally included as zero-dollar sales rather than as a separate category.
D. The number of sales for a given online service is directly proportional to the number of visitors to the online service's website, a number that tends to increase if a free trial is offered.
E. Online services that are easily adapted to free trial versions sell better than do online services that are not readily distributed as free trials.

Answers

Answer:

Option D

Explanation:

When providing an online service, a company firstly targets to reach the maximum audience. With the increase in reach of audience the chances and feasibility of sales also increases.

But, still there are many customers who desire to have a free trial of service, in order to ensure themselves about the quality and  detailed description of service.

In case company agrees to provide free trial, those customers are also satisfied and tend to avail the online service.

Thus, although the sales is directly proportional to the number of visitors, but it would definitely increase by providing the free trial of online service, as ensures more satisfaction in customers.

Final Answer

Option D

Consider four types of markets: monopoly, perfect competition, oligopoly, and monopolistic competition. If they were ranked from the lowest number of firms to the largest number of firms the ranking would

Answers

Answer:

Monopoly

Oligopoly

monopolistic competition

Perfect competition

Explanation:

A perfect competition is characterized by many buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.    

A monopolistic competition is when there are many firms selling differentiated products in an industry. A monopolistic competition has characteristics of both a monopoly and a perfect competition. the demand curve is downward sloping. it sets the price for its goods and services.

examples of monopolistic competition are restaurants  

A monopoly is when there is only one firm operating in an industry. there is usually high barriers to entry of firms. the demand curve is downward sloping. it sets the price for its goods and services.

An example of a monopoly is an utility company

An oligopoly is when there are few large firms operating in an industry. there is high barriers to entry and exit of firms

The mayor of Newton is considering proposals to deal with an unsafe intersection. She could install a traffic light at a cost of $50,000 or she could install stop signs at a cost of $5,000. The traffic light is expected to reduce the risk of fatality by 0.45 percent and the stop signs are expected to reduce the risk of fatality by 0.054 percent. If the value of human life is estimated to be $10 million, what choice should the mayor make? Briefly explain.

Answers

Answer:

Install stop signs

Explanation:

It is observed through workings that the benefits of installing traffic signals are less than the cost of installation and the benefit of installing stop signs exceeds the cost of installing them,  therefore it will be wise for Mayor to install stop signs rather than ls signals.

DATA

Value of human life = $10 million

Cost of installing traffic signal = $50,000

Cost of installing stop signs = $5,000

Workings

Benefit ofinstalling traffic signal = 0.45% * $10 million

Benefit ofinstalling traffic signal =  $45,000

Benefit from installing stop signs = 0.054% * $10 million

Benefit from installing stop signs = $5,400

 

Which of the following statements is correct?A. Wide variations in capital structures exist both between industries and among individual firms within given industries. These differences are caused by differing business risks and also managerial attitudes. B. Drug companies (prescription, not illegal!) generally have high debt-to-equity ratios because their earnings are very stable and, thus, they can cover the high interest costs associated with high debt levels. C. Generally, debt-to-total-assets ratios do not vary much among different industries, although they do vary among firms within a given industry. D. Since most stocks sell at or very close to their book values, book value capital structures are almost always adequate for use in estimating firms' costs of capital.E. Electric utilities generally have very high common equity ratios because their revenues are more volatile than those of firms in most other industries.

Answers

Answer:

A. Wide variations in capital structures exist both between industries and among individual firms within given industries. These differences are caused by differing business risks and also managerial attitudes.

Explanation:

Put simply, all the other options aren't factual statements which lack reliability. However, it is generally accepted that not all companies would have the same capital structures (eg either equity capital or debt capital).

So, it is accurate to say that, wide variations in capital structures exist both between industries and among individual firms within given industries.

Common practices of ________ include exploiting the distinctive economic assets of different countries and regions, organizing production according to a spatial division of labor, placing earnings in offshore bank accounts to avoid paying taxes, and moving factories from high wage regions to low wage regions. *

Answers

Answer:

Transnational corporations.

Explanation:

A transnational corporation can be defined as a formal company or business enterprise that has its headquarter in its home country and operate subsidiaries which are partially or wholly owned by it, in other countries across the world.

A transnational corporation must have at least one (1) subsidiary in another country or must have its operations in at least two (2) countries.

Common practices of transnational corporations include exploiting the distinctive economic assets of different countries and regions, organizing production according to a spatial division of labor, placing earnings in offshore bank accounts to avoid paying taxes, and moving factories from high wage regions to low wage regions.

Some examples of transnational corporations are Nestle, McDonalds, Unilever, Shell, Mtn, etc.

In the short run, with predetermined prices, when output is greater than planned aggregate expenditures:

Answers

Answer:

The decrease in production, is the right answer.

Explanation:

The decrease in production because if the output is more than planned aggregate expenditure then the equilibrium point will be at a lower point. Thus, in order to reach the equilibrium level, the production has to decrease. Moreover, if the output is lower than the planned aggregate expenditure then the production should be increased to reach the equilibrium point.

Red Co. reported cash paid for interest of $55,000 in its statement of cash flows for the current year. Red did not capitalize any interest during the current year. The following changes on their balance sheet occurred: accrued interest payable decreased by $13,000 along with a decrease in prepaid interest of $21,500. What amount should Red report as interest expense in its current year statement of income

Answers

Answer:

$63,500

Explanation:

Interest expense paid in cash           $55000  

Less: Adjusted for accrued interest  $13,000

payable

Add: prepaid interest adjusted         $21,500

Interest expense in its current year  $63,500

statement of income

The international marketing manager of an office furniture company ordered a research report on global telecommunications equipment sales. The report noted that, in the early 1990s, AT

Answers

Answer:

The remaining part of the question is:

The report noted that, in the early 1990s, AT&T was awarded a $4 billion contract to provide communication network products and services in Saudi Arabia. The manager took this as a cue to put Saudi Arabia on her information agenda, reasoning that office furniture sales would increase as the country's telephone system was improved. As described here the marketing manager is viewing Saudi Arabia as a(n):

Correct Answer:

Incipient market

Explanation:

Incipient Market is the type of market where export firms can use market research to know the trends and preferences that indicate emergence of future markets.  And, also, with solid efforts, export firms can create potential markets and gradually convert these into existing markets. Currently, incipient market does not exist.

If you are using the social ecological model to help an employer change the personal time allocations based on seniority at a large corporation, you would be changing factors at the intrapersonal level of influence.

a. True
b. False

Answers

Answer:

a. True

Explanation:

The social-ecological model is the model that comprises of an individual, relationship, community and societal. here individual is based on age, education income, etc. The relationship can be in family, peer group, etc. The community could be in social, school, religious places, etc. And, the societal could be in society and its cultural norms

Based on the given situation, the statement is true as the factors could be changed according to the level of intrapersonal.

it is necessary for aquasona inc a company that packages drinking water to regualry change in operational planning. the managers of the company typcially do the planning are _____ managers.

Answers

Answer: first line managers

Explanation:

First-line managers are the managers who are usually closest to the employees of an organization as they are at the management's entry level. It should be noted that they are responsible for ensuring that the objectives of an organization are achieved.

With the above explanation, the answer to the question is first line managers.

Increasing complexity of management and challenges of coordination as firms produce more of the same product can be a source of

Answers

Complete Question:

Increasing complexity of management and challenges of coordination as firms produce more of the same product can be a source of

Group of answer choices

a. economies of scale.

b. learning curves.

c. diseconomies of scale.

d. increasing marginal productivity.

Answer:

C. diseconomies of scale.

Explanation:

Increasing complexity of management and challenges of coordination as firms produce more of the same product can be a source of diseconomies of scale.

Diseconomies of scale can be defined as the cost disadvantages or pitfalls that an organization accrues as a result of its expansion or increase the level of production and output. This ultimately implies that, due to an increase in quantity of goods being produced or organizational size, the cost per unit for each product rises.

When an employee's personal values are inconsistent with the configuration of values held by the work group, the employee might experience:_________

Answers

Answer:

Ethical conflict.

Explanation:

When an employee's personal values are inconsistent with the configuration of values held by the work group, the employee might experience an ethical conflict. This ultimately implies that, if the personal values, beliefs, ideals, of an employee is not in tandem with that of his or her work group (team members), then there's most likely to be an ethical conflict which would be experienced by such an employee.

For example, an employee is asked to lie about a fraud committed by his or her superior.

The city has proposed a number of water treatment and conservation projects the cost of which raises water bills high enough so that even environmentalists are beginning to raise alarms.
a. the cost of which raises water bills high enough so that.
b. at a cost raising water bills so high that.
c. at a cost which raises water bills high enough so.
d. whose cost will raise water bills so high that.
e. whose cost will raise water bills high enough so that.

Answers

Answer:

b. at a cost raising water bills so high that.

Explanation:

From the description of the sentence, it shows that the action when performed would yield the observed outcome. The cost of the project which would result to an exorbitant rise of water bills has to be questioned.

Thus the most suitable option is b, so that the correct expression would be;

The city has proposed a number of water treatment and conservation projects at a cost raising water bills so high that even environmentalists are beginning to raise alarms.

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