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Fiesta28 [93]
3 years ago
13

Consider the following information for three stocks, A, B, and C. The stocks' returns are positively but not perfectly positivel

y correlated with one another, i.e., the correlations are all between 0 and 1. Stocks Expected Stock Return Standard Deviation BetaA 10% 20% 1.0B 10% 10% 1.0C 12% 12% 1.4 Portfolio AB has half of its funds invested in Stock A and half in Stock B. Portfolio ABC has one-third of its funds invested in each of the three stocks. The risk-free rate is 5%, and the market is in equilibrium, so required returns equal expected returns. Which of the following statements is CORRECT?a. Portfolio AB has a standard deviation of 20%.b. Portfolio AB's coefficient of variation is greater than 2.0.c. Portfolio AB's required return is greater than the required return on Stock A.d. Portfolio ABC's expected return is 10.66667%.e. Portfolio ABC has a standard deviation of 20%.
Business
1 answer:
rjkz [21]3 years ago
5 0

Answer:

The answer is letter D.

Explanation:

The correct statement is  Portfolio ABC's expected return is 10.66667%

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Faye files a suit in a state court against Gas Station Stop, claiming employment discrimination. Gas Station loses the suit and
densk [106]

Answer:

a.

Explanation:

Based on the information it can be said that in this scenario either party can appeal the decision to the United States Supreme Court if a federal question is involved. This means that there is an issue within the case that involves the constitution or other federal laws. These types of issues are cause for being able to take the case to the Supreme court.

7 0
2 years ago
Due to ____, market forces should realign the cross exchange rate between two foreign currencies based on the spot exchange rate
gayaneshka [121]

Answer:

The correct answer is C

Explanation:

Covered interest arbitrage (CIA), it is an strategy or tool of arbitrage trading, where the investor capitalizes on the rate of interest which is differential among two countries through using the forward contract for eliminate the exposure or cover to exchange the rate risk.

So, because of covered interest arbitrage, the market forces realign the cross exchange rate among two countries grounded on spot exchange rates of two currencies.

8 0
3 years ago
Which must be considered when beginning a new photoshop project.
gizmo_the_mogwai [7]

you need ideas and concepts

8 0
2 years ago
"Sydney has a portfolio with 50 shares of AAA with a current value of $20 per share, a return of 12%, and a beta of 1.30. She al
Nezavi [6.7K]

Answer: 12.72%

Explanation:

Given the following information ;

50 Shares of AAA at $20 and expected returns of 12%

25 Shares of BBB at $60 and expected returns of 10%

75 Shares of CCC at $50 and expected returns of 14%

Total value of the portfolio ;

Total Portfolio Value = ( 50×20 ) + ( 25×60 ) + ( 75×50 )

= 1000 + 1500 + 3750 = $6,250

Weight of each share in the portfolio;

Weight of Stock AAA = ( 50×20 ) / 6250 = 0.16

Weight of Stock BBB = ( 25×60 ) / 6250 = 0.24

Weight of Stock CCC = ( 75×50 ) / 6250 = 0.60

Expected return on portfolio is calculated thus;

Expected Portfolio Return = ( Weight of AAA×Expected Returns ) + ( Weight of BBB×Expected Returns ) + ( Weight of CCC×Expected Returns )

Expected Portfolio Return = ( 0.16×0.12 ) + ( 0.24×0.10 ) + ( 0.60×0.14 )

Expected portfolio return = (0.0192+0.024+0.084) = 0.1272

0.1272 = 12.72%

6 0
3 years ago
A corporation has outstanding $5,000,000 of 9 1/2% 20-year debentures, with a conversion price of $40. If all the debentures wer
Fiesta28 [93]

Answer:

The 125,000 shares of common stock would be issued

Explanation:

For computing how many shares of common stock would be issued, we have to use the formula of common share produced which is shown below:

Common share produced = Par value ÷ Conversion price

where,

Par value is $5,000,000

And, the conversion is $40

Now, apply these values to the above formula

So, the value would be equals to

= $5,000,000 ÷ $40

= 125,000

The time period and rate of debentures is irrelevant, Thus, it is ignored.

Hence, the 125,000 shares of common stock would be issued.

8 0
3 years ago
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