Answer:
amount invest in B is 2000
Explanation:
given data
invested in Fund A = 5000
return profit A = 3%
return profit B = 10%
both together returned profit = 5%
solution
we consider here amount invest in B = x
so profit from fund B is
profit from fund B = 10% × x = 0.1 x
and
profit from fund A = 5000 × 3% = 150
so total profit = 0.1x + 150
and total profit = 5%
so we can say
5% = 
solve it we get
x = 2000
so amount invest in B is 2000
Answer:
Jameson's current stock price, P0 is $18.62
Explanation:
Required rate of return = Risk free rate + Beta*Market risk premium.
= 4.00% + 1.15*5.00 %
= 9.75 %
Current stock price, P0
= Expected dividend per share/(Required rate of return - Growth in dividends)
= (0.75 + 5.50%*0.75)/(0.0975 - 0.055)
= $18.62
Therefore, Jameson's current stock price, P0 is $18.62
Answer:
<u>Solution and Explanation:</u>
<u>Evaluation for investment decisions
</u>
- Investing for Wedding
- Investing for Retirement
- Energy sector mutual fund
- General electric bond – 18 months
- Johnson & Johnson stock
- Money market shares
- General electric bond – 2.5 years
- Short term junk Bonds
- Treasury Note – 60 months
CD – 24 months= Maturity period has met the criteria for short term goal and money used for their wedding
General electric bond – 18 months=Bonds are generally Long term or short term depends upon the maturity period for this bond has only 18 months maturity period
Money market shares = This instrument is readily converted into cash at any point in time
Saving account = No obligation of any maturity period saving account is personal account
Short term junk Bonds = Short term junk bonds are for a short period of time
Energy sector mutual fund = This sector mutual fund has long term maturity period and thereafter returns in the long term
Johnson & Johnson stock = It is considered as a dividend growth stock and investor invest for high growth on the market value of the share price
General electric bond – 2.5 years = This instrument has a long term maturity period
Dow ETF ETF is retained for capital gains in the near future period but their gestation period is high
Treasury Note – 60 months = Investment for 60 months which is not suited for short term goal of investor
Answer:
Answer Illustration : Opportunity Cost of producing Wine is lesser in France, Opportunity Cost of producing Sweaters is lesser in Tunisia. So, France has comparative advantage in Wine, Tunisia in Sweater.
Explanation:
Opportunity Cost is the cost of next best alternative foregone while choosing an alternative.
Opportunity Cost of producing Sweaters & Wine in France & Tunisia are quantities of other goods (Sweaters or Tunias) sacrifised while choosing either. Sweater Opportunity Cost - Wines sacrifised, Wine Opportunity Cost - Sweaters sacrifised.
The country has a comparative advantage in a good if it can produce it with relatively less opportunity cost (in terms of other good sacrifised) than other country.
Ex : Production Possibilities
Wine Sweater Trade off (Wine :Sweater)
France 10 5 1:0.5 or 2:1
Tunisia 8 24 1:3 or 0.33:1
- France produces Wine with lesser opportunity cost (sweater sacrifised) than Tunisia [0.5 sweater < 3 sweaters] ; it has comparative advantage in Wine.
- Tunisia produces Sweater with less opportunity cost (wine sacrifised) than France [ 0.33 wine < 2 wines] ; it has comparative advantage in Tunisia
