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2 years ago

If your risk aversion index a = 4, what is your optimal allocation between risky asset p ( ) and risk-free asset (1- )?

Business

1 answer:

Ganezh [65]2 years ago

5 0

10.82 is your optimal allocation between risky asset p ( ) and risk-free asset (1- ).

Expected return & Return X Probability.

:. Expected return of fund "A" B #x05+ (-5X0·3) + 20x⋅ 2 => 6 25x.5+ 10x 3+ (-25x-2)510-s LA L

Calculation of standard deviation, and correlations

1X0.5 +121X0·3+ 196X-2 872

√210.25x0.540.25x0.3 +1260.25x0·2 18.90

Co-variance. = 14.5x0.5 +5.5x0·3+ (-497×0.2) -90.5

Co-relation=-90.5 -0.55

8.72×18.90

with the use of the given formula given. Calculation of weight: -

W₁ = (6-4.25) (18.90)² - [ 10.5-4.25x1-90·5)

(6-4.25) (18.90)²+ 10.5-4.25]($.72)²=-(6-4-25+1015-4:25] × (90·5)

625-1175 + 565.625

5) 1190.7425 = 0.65 1824.3575

625.1175+ 475.24+724

1-0.65 0.35 A

7.5757 • Expected return of portfolio = 6x0.65 +10.5x0.35

Standard deviation (r) of portfolio - 18-72x0.65) + (18 · 9X8:35) 72 (8-72X0·65) (8·4x0-35 x0.55

10.82.

A risky asset is an asset that involves some risk. Risky assets generally refer to assets with high price volatility, such as Examples: Stocks, Commodities, High Yield Bonds, Real Estate, and Currencies.

Learn more about the risky assets at

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Relationship between short and long run in Philips curve

saw5 [17]

Answer:

In the short-run, inflation and unemployment are inversely related; as one quantity increases, the other decreases. In the long-run, there is no trade-off. In the 1960's, economists believed that the short-run Phillips curve was stable.

Explanation:

https://courses.lumenlearning.com/boundless-economics/chapter/the-relationship-between-inflation-and-unemployment/

4 0

2 years ago

A trader maintains a position in a small capitalization stock that has low trading volume. The trader has a high level of which

swat32

Answer:

B) Liquidity

Explanation:

Liquidity is the ability of quickly buy or sell a stock without any price change.

Liquidity in a small-capitalization stock that has low trading volume is generally low that causes a problem for traders. It is so because in small capitalization, traders are unable to understand potential pitfalls and blindly invest in small-capitalization stocks which do not give profit as expected and the liquidity becomes low.

Hence, the correct answer is B) Liquidity.

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3 years ago

Tech Performance, Inc., completes programming and other tech services for Uno IT Products Corporation. When Uno IT’s computer sy

Nana76 [90]

Answer:

Kindly go through the Explanation.

Explanation:

While responding back Tech Performance who would be referred as a defendant in this occasion may opt for two of the response:

1. Tech Performance to file an answer & defend

The answer filed should include admit of statements and the allegations put across by Uno IT or to simply deny them & set defenses from the defendants part. As by any chance if defendant admits to the allegations filed by UNO computer systems, the judgment will surely be in favor of UNO computer systems. But if defendant denies the allegations then the matter would proceed further as per the guidelines of the federal court, which will give enough time to Tech performance to be prepared with their set of defense statement.

Hence While filing the answers the defendant may file an affirmative defense according to which the defendant will agree to the truth of the complaint but would raise new facts in order to confront that the defendant firm should not be held responsible/ liable for the damage sustained by UNO. The defendant could also deny Uno IT’s allegations and assert a counterclaim stating and proving that the reason of the crash occurred causing loss was due to certain actions from UNO It’s end. Also it may also allege Uno IT for the damage done to the reputation of the Tech Performance.

2. Tech Performance to file a motion to dismiss instead of an answer

The defendant may file a motion to dismiss stating that the motion might contend that even if the facts presented in the complaint are true, their legal consequences such as there is no reason to go ahead with the suit. Other section for this motion includes improper service of process and the court’s lack of jurisdiction. In this case of filing a motion, if the motion is denied the defendant will be given time to file an answer and if its granted, Uno IT will be given time to file an amended complaint.

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3 years ago

When it comes to executing plans, what is the role of a manager?

tiny-mole [99]

When it comes to executing plans, the role of a manager is controlling and problem solving.

<h3>Who is a manager?</h3>

Managers supervise the activities of others in order to achieve goals. Managers in the modern workforce may be in charge of systems or specific functions that do not involve humans.

A manager has several responsibilities in an organization. One of them is concerned with carrying out the plan devised to achieve organizational objectives. A manager uses this plan to control and solve problems that may arise while carrying out the plan, as well as to make necessary adjustments.

For example, compare actual results to planned results and make adjustments as needed.

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8 0

1 year ago

________ is defined as a market outcome in which the marginal benefit to consumers of the last unit produced is equal to the mar

tensa zangetsu [6.8K]

Answer:

Economic efficiency

Explanation:

Economic efficiency is when the allocation of resources in an economy is fully optimal and benefits all economic agents. It is when nothing can be improved without putting another at a disadvantage.

It is when there's equilibrium in the economy.

I hope my answer helps you

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3 years ago