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Andrews [41]
3 years ago
5

A portfolio is composed of two stocks, Z and Y. Stock Z has a standard deviation of return of 22%, while stock Y has a standard

deviation of return of 16%. Stock Z comprises 60% of the portfolio, while stock Y comprises 40% of the portfolio. If the variance of return on the portfolio is 0.033, the correlation coefficient between the returns on A and B is
Business
1 answer:
user100 [1]3 years ago
5 0

Answer:??

Explanation:

You might be interested in
Inception is the initial short step to establish a common vision and basic scope for the project.
exis [7]

Answer:

true

Explanation:

Things to consider in the inception stage are the vision of the project, the feasibility of the project, cost estimate and if the project should be undertaken.

some of the steps taken in the inception stage includes:

the analysis of the critical non-functional  requirement

the creation of a business case,

Preparation for the elaboration phase

8 0
2 years ago
You are valuing an investment that will pay you $28,000 per year for the first 4 years, $43,000 per year for the next 12 years,
shepuryov [24]

Answer:

The value of the investment to you today is $441,751.52.

Note: The correct answer is is $441,751.52 but this is not included in the option. Kindly confirm the correct answer again from your teacher.

Explanation:

This can be determined using the following 5 steps:

Step 1. Calculation of today's of $28,000 per year for the first 4 years

This can be calculated using the formula for calculating the present value of an ordinary annuity as follows:

PV28,000 = P * ((1 - (1 / (1 + r))^n) / r) …………………………………. (1)

Where;

PV28000 = Present value or today's value of of $28,000 per year for the first 4 years = ?

P = Annual payment = $28,000

r = Annual discount return rate = 12%, or 0.12

n = number of years = 4

Substitute the values into equation (1) to have:

PV28,000 = $28,000 * ((1 - (1 / (1 + 0.12))^4) / 0.12)

PV28,000 = $85,045.78

Step 2. Calculation of today's of $43,000 per year for the next 12 years

Present value at year 4 can first be calculated using the formula for calculating the present value of an ordinary annuity as follows:

PV after 4 = P * ((1 - (1 / (1 + r))^n) / r) …………………………………. (2)

Where;

PV at 4 = Present value at year 4 = ?

P = Annual payment = $43,000

r = Annual discount return rate = 12%, or 0.12

n = number of years = 12

Substitute the values into equation (2) to have:

PV at 4 = $43,000 * ((1 - (1 / (1 + 0.12))^12) / 0.12)

PV at 4 = $266,358.09

Therefore, we have:

PV43000 = PV at 4 / (1 + r)^n .............................. (3)

Where;

PV43000 = Present value or today's value of of $43,000 per year for the first 12 years = ?

PV at 4 = $266,358.09

r = Annual discount return rate = 12%, or 0.12

n = number of years = 4

Substitute the values into equation (3) to have:

PV43000 = $266,358.09 / (1 + 0.12)^4

PV43000 = $169,275.38

Step 3. Calculation of today's of $69,000 per year for the next 16 years

Present value at year 12 can first be calculated using the formula for calculating the present value of an ordinary annuity as follows:

PV after 12 = P * ((1 - (1 / (1 + r))^n) / r) …………………………………. (4)

Where;

PV at 12 = Present value at year 12 = ?

P = Annual payment = $69,000

r = Annual discount return rate = 12%, or 0.12

n = number of years = 16

Substitute the values into equation (4) to have:

PV at 12 = $69,000 * ((1 - (1 / (1 + 0.12))^16) / 0.12)

PV at 12 = $481,205.04

Therefore, we have:

PV69000 = PV at 12 / (1 + r)^n .............................. (5)

Where;

PV69000 = Present value or today's value of of $69,000 per year for the first 16 years = ?

PV at 12 = $481,205.04

r = Annual discount return rate = 12%, or 0.12

n = number of years = 12

Substitute the values into equation (5) to have:

PV69000 = $481,205.04 / (1 + 0.12)^12

PV69000 = $123,513.35

Step 4. Calculation of today's of $61,000 per year for the next 13 years

Present value at year 16 can first be calculated using the formula for calculating the present value of an ordinary annuity as follows:

PV after 16 = P * ((1 - (1 / (1 + r))^n) / r) …………………………………. (6)

Where;

PV at 16 = Present value at year 16 = ?

P = Annual payment = $61,000

r = Annual discount return rate = 12%, or 0.12

n = number of years = 13

Substitute the values into equation (6) to have:

PV at 16 = $61,000 * ((1 - (1 / (1 + 0.12))^13) / 0.12)

PV at 16 = $391,836.45

Therefore, we have:

PV61000 = PV at 16 / (1 + r)^n .............................. (7)

Where;

PV61000 = Present value or today's value of of $61,000 per year for the first 13 years = ?

PV at 16 = $391,836.45  

r = Annual discount return rate = 12%, or 0.12

n = number of years = 16

Substitute the values into equation (7) to have:

PV69000 = $391,836.45 / (1 + 0.12)^16

PV69000 = $63,917.01

Step 5. Calculation of the value of the investment to you today

This can be calculated by adding the values above:

PV = PV28,000 + PV43000 + PV69000 + PV69000 = $85,045.78 + $169,275.38 + $123,513.35 + $63,917.01 = $441,751.52

Therefore, the value of the investment to you today is $441,751.52.

4 0
2 years ago
Which sentence best demonstrates an appropriate style for an argumentative essay? anyone who believes we should increase taxes i
oee [108]

I believe the answer is: Increasing taxes would place an unnecessary hardship on the citizens and should be avoided

Argumentative essay refers to a type of essay that is created in order to convince other people to adopt a certain idea or opinion. Appropriate style for an argumentative essay usually include clear correlation on how a certain action or choice would resulted in a certain situation/results , just like the sentence above.

4 0
3 years ago
Read 2 more answers
Red Company had Work-in-Process Inventories that were 45% complete at the start of the month. Work-in-Process at the end of the
givi [52]

Answer:

D. transferred out during the process plus the units in the ending inventory.

Explanation:

Using the Weighted - Average process costing the equivalent units of production always equals the units completed and transferred plus equivalent units remaining in work in process.

Remember that to calculate the equivalent units remaining must multiplicate the units per the percentage of completion. In this case, the percentage is 100% of materials for the units remaining because were added at the beginning of the process.

8 0
2 years ago
John Roberts is 55 years old and has been asked to accept early retirement from his company. The company has offered John three
Ludmilka [50]

Answer:

The best alternative will be of 180,000 today.

Explanation:

We calculate the present value of the second and third alternatives and compare with the cash received today:

.2. A 20-year annuity of $16,000 beginning immediately

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

C 16,000

time 20

rate 0.07

16000 \times \frac{1-(1+0.07)^{-20} }{0.07} = PV\\

PV $169,504.2279

3.- A 10-year annuity of $50,000 beginning at age 65.

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

C       $  50,000

time 10 years

rate 0.07

50000 \times \frac{1-(1+0.07)^{-10} }{0.07} = PV\\

PV $351,179.0770

This start at age 65 currently he's 55 so we bring it to present:

\frac{Maturity}{(1 + rate)^{time} } = PV  

Maturity $  351,179.08

time   10 years

rate  0.07

\frac{351179.07704663}{(1 + 0.07)^{10} } = PV  

PV   178,521.64

As non of the alternatives is better than 180,000 today we pick this alternative.

7 0
3 years ago
Read 2 more answers
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