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sleet_krkn [62]
2 years ago
9

Here are some characteristics of two portfolios, the market index, and the risk-free asset. Expected Return Beta Standard Deviat

ion Portfolio A 11% 0.8 10% Portfolio B 14% 1.5 31% Market index 12% 1 20% T-bills 6% 0 0% Required: a-1. Calculate the return predicted by CAPM for a portfolio with a beta of 0.8. (Round your answer to 1 decimal place.) a-2. Calculate the return predicted by CAPM for a portfolio with a beta of 1.5. b. If instead you could invest only in bills and one of these portfolios, which would you choose
Business
1 answer:
SVETLANKA909090 [29]2 years ago
3 0

A. 1. Return predicted by capital asset pricing model for portfolio of .8

= (Risk free return+(Market return- risk free rate)B

B= Beta.

=(.06+(-12-06),8)

=(.06+,048)

= 10.80%.

A.2. Capital Asset pricing model return for portfolio of Beta of 1.5

=(.06+(-12-.06)1.5)

= 15.00%.

A.3. PORTFOLIO A- Portfolio A will be selected for investment because expected return is higher than required return and the portfolio is currently undervalued.

To know more portfolio visit:

brainly.com/question/17165367

#SPJ4

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Sarah's Muffler Shop has one standard muffler that fits a large variety of cars. Sarah wishes to establish a reorder point syste
GarryVolchara [31]

Answer:

Following is the solution for the given problem.

Explanation:

Best order size, EOQ =√2DS/H

EOQ = √2*4700*60/5

EOQ = 336 units.

D = 4700/300 = 15.66.

σ L= √∑σ²

= √3*(5)² = 8.66.

Reorder point, R = D*L+ z σ L

Reorder point, R = 15.66*3 + 1.282*8.66

Reorder point, R = 58 units.

4 0
3 years ago
Using the variable cost method, determine the selling price (rounded to the nearest dollar) for 30,000 units using the following
Brilliant_brown [7]

Answer:

c. $8

Explanation:

Calculation to determine the selling price

First step is to calculate the Markup percent

Markup percent= (90,000 + 150,000) / (30,000 x 15)

Markup percent = .533

Now let calculate the selling price

Selling price=533 x $15 per unit

Selling price= $8

Therefore the Selling price will be $8

7 0
3 years ago
Hughes Co. is growing quickly. Dividends are expected to grow at a rate of 22 percent for the next three years, with the growth
Oksana_A [137]

Answer: $53.94

Explanation:

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Terminal value = D₄ / ( required return - growth rate)

= (2.35 * 1.22³ * 1.05) / (12 % - 5%)

= $64

D₁ = 2.35 * 1.22 = $2.867

D₂ = 2.867 * 1.22 = $‭3.49774‬

D₃ = ‭3.49774‬ * 1.22 = $‭4.2672428‬

Share price = (2.867 / (1 + 12%)) + (‭3.49774‬ / 1.12²) + (‭4.2672428‬ / 1.12³) + (64/1.12³)

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7 0
3 years ago
If, at the current price, there is a shortage of a good, thena. sellers are producing more than buyers wish to buy.b. the market
sdas [7]

Answer:

C. the price is below the equilibrium price

Explanation:

Remember, in the law of demand and supply the quantity supplied is dependent on the value of the price of a good.

In this case the price is below the equilibrium price; meaning demand would be higher than the supply which results in the shortage of the good and the company therefore raises the price of the good.

For example, the price of oranges decrease in the equilibrium price (from $10 to $5), resulting in an increase in the demand for oranges.

The increase in demand would lead to shortage, making farmers increase price wanting to supply more.

7 0
4 years ago
Select the correct answer. Which definition refers to visual merchandising? A. the art of presenting merchandise in a creative w
WITCHER [35]

Answer:

A

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the art of presenting merchandise in a creative way that helps the store reach out to people

(if its not a, then its d)

6 0
3 years ago
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