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10 months ago

Why does including reits in a portfolio containing s&p 500 securities produce diversification benefits?

1 answer:

7 0

REIT returns are highly correlated with returns from other stocks is including reits in a portfolio containing s&p 500 securities produce diversification benefits. Hence, option C is correct.

<h3>What is stock portfolio?</h3>

A stock portfolio is a collection of stocks that a person invest in with the hope of making money. By putting together a diverse portfolio that covers numerous industries, you can develop your investing skills.

For many years, constructing a 60/40 portfolio in which 60% of the capital would be put in stocks and 40% in fixed-income instruments such as bonds was commonly suggested by financial consultants. Others have called for more equity exposure, particularly younger investors.

Thus, option C is correct.

For more details about stock portfolio, click here:

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The options are missing-

(A) REIT returns are enhanced by the dividend payout requirement

(B)REIT returns are not subject to federal income taxes if certain rules are met

(C)REIT returns are highly correlated with returns from other stocks

(D)REIT return are not highly correlated with returns from other stocks

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_____ involves developing separate marketing strategies for a number of segments.

solniwko [45]

Answer:

A. Differentiated marketing

Explanation:

Differentiated marketing -

It refers to the marketing strategy , where the company tries to target to at least two specific group , is referred to as a differentiated marketing.

In this strategy , different messages are used for the same campaign of different segments.

Hence , from the given statement ,

The correct option is A. Differentiated marketing .

4 0

2 years ago

Narchie sells a single product for $50. Variable costs are 60% of the selling price, and the company has fixed costs that amount

Ainat [17]

The break even units is 20,000 units

<u>Explanation:</u>

<u>Firstly, the break even units needds to be calculated and is as follows:</u>

Selling price per unit = $50.00

variable costs = $30.00

Contribution Margin per unit = $20.00

BEP units = Fixed cost by contribution margin per unit

Fixed overhead = $400000

Contribution margin = $20

BEP = 20000 units

where : BEP = Break even units

Therefore, the break even units will be at 20000 units.

As per the given options in the question, the option C is the correct option.

3 0

2 years ago

What is the standard deviation of a stock that has a 10% chance of earning 18%, a 10% chance of making 11%, a 40% chance of maki

Yakvenalex [24]

Answer:

A. 7.95%.

Explanation:

Calculate the expected rate of return for the investment as follows:

$\begin{aligned}\text { Expected rate of return } &=(\text { Probability } \times \text { Rate of return })+(\text { Probability } \times \text { Rate of return })+\\&(\text { Probability } \times \text { Rate of retum }) \\=&(0.40 \times 15 \%)+(0.50 \times 10 \%)+(0.10 \times-3 \%) \\=& 0.06+0.05-0.003 \\=& 0.107$

Calculate the standard deviation of the investment as follows:

$\begin{aligned}\text { Standard deviation }=&\left\{\begin{array}{l} \text { Probability } \left.\times(\text { Return }-\text { Expected return })^{2}\right)+ \\\text { (Probability } \left.\times(\text { Return }-\text { Expected return })^{2}\right)+ \\\text { (Probability } \left.\times(\text { Return }-\text { Expected return })^{2}\right)\end{array}\right.$

= $\sqrt{\left(0.40 \times(0.15-0.107)^{2}\right)+\left(0.50 \times(0.10-0.107)^{2}\right)+} \\=\sqrt{0.0007396+0.0000245+0.0018769} \\=\sqrt{0.002641} \\=0.05139066063011$

7 0

2 years ago

From an economic perspective, when consumers leave a fast-food restaurant because the lines to be served are too long, they have

Dmitry_Shevchenko [17]

Answer:

the marginal cost of waiting is greater than the marginal benefit

Explanation:

Marginal cost is the additional cost as a result of carrying out a particular activity.

Marginal benefit is the additional benefits that accrue to an individual for carrying out an activity

It is assumed that human beings are rational, utility maximisers. They would not continue to carry out an activity if the marginal cost is greater than the benefit

7 0

2 years ago

Rolfes Company purchased merchandise on account from a supplier for $7,500, terms 1/10, n/30. Rolfes Company returned $1,200 of

Blababa [14]

Answer:

$6,237

Explanation:

The computation of the cash required for the payment is shown below:

= Merchandise amount - return and allowances - discount

= $7,500 - $1,200 - $63

= $6,237

The discount = (Merchandise amount - return and allowances) × discount rate

= ($7,500 - $1,200) × 1%

= $63

Simply we consider the items i.e merchandise purchase amount, returned merchandise amount and the discount given amount

6 0

2 years ago