Answer:
Portfolio return = 0.1004646154 or 10.04646154% rounded off to 10.05%
Option B is the correct answer
Explanation:
The expected return of a portfolio is the function of the weighted average of the individual stock returns that form up the portfolio. The formula to calculate the expected return of a two stock portfolio is as follows,
Portfolio return = wA * rA + wB * rB
Where,
- w is the weight of each stock
- r is the rate of return on each stock
As the investment in total portfolio is 97500 and the investment in stock A is 84650, the investment in stock B will be,
Stock B = 97500 - 84650 = 12850
Portfolio Return = 84650 / 97500 * 0.106 + 12850 / 97500 * 0.064
Portfolio return = 0.1004646154 or 10.04646154% rounded off to 10.05%
Answer:
$10,503.59
Explanation:
This question requires us to find how much you have to deposit today if:
Fv = 18,000
Time = 9 years
PV= fv/(1 + i)^n
N = 9 X 12 = 108
I/y = 0.5%
PV = $18,000 / 1.005^108
= $10,503.59
Therefore what you have to deposit today is $10,503.59
Answer:
(i) $240, (ii) will buy, (iii) will not buy, (iv) True
Explanation:
(i)
Actuarially fair price = 2% of $12,000
= (2 / 100) * $12,000
= $240
(ii)
will buy insurance because now the price of insurance is $240 which was $2,880(i.e 72000 × 4% ) previously for drivers with $56,000 in the bank i.e now the price of insurance is reduced so the drivers will buy the insurance.
will not buy insurance because now the price of insurance is $240 which was $140 (i.e 3,500 × 4%) previously for drivers with 3,500 in the bank i.e now the price of the insurance is increased so the drivers will not buy.
True because at the actuarially fair price of $240, the drivers with $3,500 in bank will not voluntarily purchase the insurance.
Answer:
C. Decreases money supply
Explanation:
The contractionary fiscal policy happens when the central bank of a particular nation raises its interest rates to prevent inflation.This will result to a decrease in money supply in the economy.The government expenditures are cut-down and there will be increased taxes causing the budget surplus of the government to increase.
