Answer:
a) The expected return of equally weighed portfolio is 14.23%
b) The expected return of equally weighed portfolio is 16.45%, hence Variance = 1.596457%
Explanation:
See workings of a and b attached in a form of spreadsheet.
Answer:
Total assets $
Building 102,100
Motor vehicle 19,907
Furniture <u>10.442</u>
Total assets <u>132,449</u>
<u></u>
Total liabilities $
Mortgage loan 58,347
Outstanding loan 2,567
Utility bills unpaid <u>242</u>
Total liabilities <u> 61,156</u>
Debt ratio = Total liabilities x 100
Total assets
Debt ratio = $61,156 x 100
$132,449
Debt ratio = 46.17%
Explanation:
In this case, there is need to calculate the total assets, which is the aggregate of building, motor vehicle and furniture.
We also need to calculate the total liabilities, which is the aggregate of mortgage loan, car loan outstanding and utility bills unpaid.
Debt ratio is obtained by dividing total liabilities by total assets multiplied by 100.
Answer:
The answer is: A) A decrease in the price of paper used to make greeting cards.
Explanation:
In normal market conditions, an increase in the equilibrium quantity of greeting cards means that the quantity demanded and the quantity supplied of greetings cards increased. Usually an increase in the quantity supplied will result in an increase of the price of the good or service. But on this specific case something else made the price of the cards decrease. The only one of the four possible options that can explain an external cause for a decrease in the price of greetings cards, is a decrease in the price of paper used to manufacture them.
B. Superiority of certain races. Which often results in discrimination and prejudice towards people based on their race or ethnicity
Answer:
Initial Investment, P = $100, 000
Recurring Cost, A=$6200
(a) Calculate the internal rate of return for infinite life,
A= P(i)
6200=100000(i)
i = 6200/100000
i =6.2%
(b) Calculate the internal rate of return for 100 years,
P = A(P/A, i, 100)
100000 = 6200 (P/A, i, 100)
(P/A, i, 100) = 16.129
For i = 6%
(P/A,6%,100) = 16.618
For i = 7%
(P/A ,7%,100) = 14.269
i = [(6 - 7) / (16.618 - 14.269)] (16.129 - 16.618) +6
i = 6.2%
Thus, IRR = 6.2%
(c) Calculate the internal rate of return for 50 years,
P = A(P/A ,i , 50)
100000 = 6200 (P/A, i, 50)
(P/A, i, 50) = 16.129
For i = 6%
(P/A, 6%, 100) = 15.762
For i = 5%
(P/A , 5%, 100) = 18.256
i = [(5 - 6) / (18.256 - 15.762)] (16.129-15.762) + 6
i = 5.853%
Thus, IRR = 5.853%
(d)
In all cases internal rate of return is greater than 4%, which is minimum interest rate that one can earn. So they should consider to install the pipeline.
