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Butoxors [25]
2 years ago
14

Based on the following information: Rate of Return If State Occurs State of Probability of Economy State of Economy Stock A Stoc

k B Recession .20 .05 − .20 Normal .57 .08 .09 Boom .23 .13 .26 Calculate the expected return for the two stocks. (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16)) Expected return Stock A % Stock B % Calculate the standard deviation for the two stocks. (Do not round intermediate calculations and round your answers to 2 decimal places. (e.g., 32.16)) Standard deviation Stock A % Stock B %
Business
1 answer:
Sonja [21]2 years ago
3 0

The expected return for stock A and B is 8.55% and 15.11% respectively.

<h3>What is the Expected return?</h3>

= (Probability of Recession × Return during recession) + (Probability of normal × Return during normal) + (Probability of boom × Return during boom)

Expected return for stock A:

= (0.20 * .05) + (0.57 * 0.08) + (0.23 * 0.13)

= 0.0855

= 8.55%

Expected return for stock B:

= (0.20 * 0.20) + (0.57 * 0.09) + (0.23 * 0.26)

= 0.1511

= 15.11%

Therefore, the expected return for stock A and B is 8.55% and 15.11% respectively.

Read more about Expected return

<em>brainly.com/question/25821437</em>

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Answer:

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Explanation:

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3 years ago
Sole Mates Inc. is planning a one-month campaign for July to promote sales of one of its two shoe products. A total of $100,000
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Answer:

Sole Mates Inc.

Differential analysis:

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Unit selling price                      $85                  $100

Unit production costs:

Direct materials                        $19                   $32

Direct labor                                  8                      12

Variable factory overhead          7                       5

Unit variable selling expenses   6                     10

Total variable costs                $40                   $59

Contribution margin per unit $45                   $41            

                                        Tennis Shoe      Walking Shoe   Difference

                                        Alternative 1       Alternative 2

Total contribution margin    $315,000         $287,000       $28,000

Advertising costs                  (100,000)          (100,000)                  0

Total income (loss)             ($215,000)          $187,000      $28,000

Promote the Tennis Shoes (Alternative 1) because it will bring in more contribution margin than Alternative 2.

Explanation:

a) Data and Calculations:

Budgeted advertising costs = $100,000

                                        Tennis Shoe      Walking Shoe

Unit selling price                      $85                  $100

Unit production costs:

Direct materials                        $19                   $32

Direct labor                                  8                       12

Variable factory overhead          7                        5

Fixed factory overhead             16                       11

Total unit production costs    $50                  $60

Unit variable selling expenses   6                     10

Unit fixed selling expenses     20                     15

Total unit costs                       $76                 $85

Operating income per unit      $9                   $15

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