Answer:
=> fraction of the portfolio that should be allocated to T-bills = 0.4482 = 44.82%.
=> fraction to equity = 0.5518 = 55.18%.
Explanation:
So, in this question or problem we are given the following parameters or data or information which are; that the utility function is U = E(r) – 0.5 × Aσ2 and the risk-aversion coefficient is A = 4.4.
The fraction of the portfolio that should be allocated to T-bills and its equivalent fraction to equity can be calculated by using the formula below;
The first step is to determine or Calculate the value of fraction to equity.
Hence, the fraction to equity = risk premium/(market standard deviation)^2 - risk aversion.
= 8.10% ÷ [(20.48%)^2 × 3.5 = 0.5518.
Therefore, the value for fraction of the portfolio that should be allocated to T-bills = 1 - fraction to equity = 1 - 0.5518 =0.4482 .
Answer:
Rental prices to be increasing until shortage is eliminated
Explanation:
If there is a shortage in the rental market, it means that quantity supply has reduced. This would lead to an excess of demand over supply which is known as a shortage. When there's a shortage, prices rise until the shortage ceases.
Answer:
Answer = B
Explanation:
If nit many people want a product the seller would lower the price to make it seem like a bargain or make it more affordable
Answer:
$315
Explanation:
The before-tax cost of the wood stove would comprise of 100% sales price plus 5% sales tax as hinted.
If 5%=$15=sales tax
before-tax sales price=100% sales price+5% sales tax
before-tax sales price=105%
sales tax of 5%=$15
1%=$15/5
1%=$3
105%=$3*105
105%(before tax sales price)=$315
A benefit of adopting the euro as a common currency is that it makes it easier to compare prices across Europe.
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Explanation:</u></h3>
When the same currency type is used in different group of people or different geographic locations, it refers to the common currency. In European Nations the common currency that is being used in Euro and in U.S the common currency used is dollar. There are many benefits that are associated with the usage of common currency.
It helps in reduction of transaction cost, Price transparency, expands markets, enhances the currency stability,etc.In the example given, the prices of roses at different regions of Europe were found to be different. The prices of the rises are expressed in Euros. The use of common currency here facilitates and makes easier to compare prices across Europe.
