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sertanlavr [38]
3 years ago
8

You have developed the following data on three stocks: Stock A has a standard deviation of .15 and a Beta of .79. Stock B has a

standard deviation of .25 and a Beta of .61. Stock C has a standard deviation of .10 and a Beta of 1.29. If you are a risk minimizer, you should choose Stock _____ if it is to be held in isolation and Stock _____ if it is to be held as part of a well-diversified portfolio.
Business
1 answer:
blondinia [14]3 years ago
6 0

Answer:

As a risk minimizer : Stock A  has the lowest standard deviation, thus, it should be chosen, if it is to be held in isolation . Also stock B  has the lowest beta, thus,it should be chosen, if it is to be held as part of a well - diversified portfolio.

The answer is A and B respectively

Explanation:

The standalone risk or standard deviation of the stocks is alleviated for a well diversified investor  . So, in that case, the relevant risk would be the market risk or the beta.

When you see in isolation, relevant risk would be the standard deviation.

Therefore, as a risk minimizer : Stock A  has the lowest standard deviation, thus, it should be chosen, if it is to be held in isolation . Also stock B  has the lowest beta, thus,it should be chosen, if it is to be held as part of a well - diversified portfolio.

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Answer:

Results are below.

Explanation:

Giving the following formula:

Purchase price= $1,800,000

Salvage value= $60,000

Useful life= 8 years or 600,000 units

<u>To calculate the annual depreciation using the units-of-production method, we need to use the following formula:</u>

Annual depreciation= [(original cost - salvage value)/useful life of production in units]*units produced

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Annual depreciation= $203,000

<u>To calculate the annual depreciation using the double-declining balance, we need to use the following formula:</u>

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Annual depreciation= 2*[(book value)/estimated life (years)]

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Annual depreciation= $435,000

<u>Finally, the annual depreciation using the straight-line method:</u>

Annual depreciation= (original cost - salvage value)/estimated life (years)

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Annual depreciation= $217,500

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2 years ago
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3 years ago
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Alona [7]

Answer:

forgo interest = $30

interest = $75

Explanation:

given data

annual interest = 2%

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to find out

how much interest would she forgo and how much will she pay in interest

solution

first we get here Forgo interest that is here

forgo interest = withdrawal amount × interest rate ..........................1

put here value we get

forgo interest = $1500 × 2%

forgo interest = $30

and

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interest = amount borrow × interest rate ..........................2

put here value we get

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attashe74 [19]

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