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Natali [406]
3 years ago
8

You are considering investing $1,000 in a T-bill that pays 0.05 and a risky portfolio, P, constructed with two risky securities,

X and Y. The weights of X and Y in P are 0.60 and 0.40, respectively. X has an expected rate of return of 0.14 and variance of 0.01, and Y has an expected rate of return of 0.10 and a variance of 0.0081. What would be the dollar value of your positions in X, Y, and the T-bills, respectively, if you decide to hold a portfolio that has an expected outcome of $1,120? Group of answer choices a.$568; $54; b.$378 $108; c.$514; $378 d.$378; $54; e.$568 $568; f.$378; $54
Business
1 answer:
Nesterboy [21]3 years ago
8 0

Answer:

c)$568; $378; $54

Explanation:

($1,120 - $1,000)/$1,000 = 12%

(0.6)14% + (0.4)10% = 12.4%

12% = w5% + 12.4%(1 - w)

w = .054

1-w = .946

w = 0.054($1,000)

= $54 (T-bills)

1 - w = 1 - 0.054 = 0.946

0.946($1,000) = $946

$946 x 0.6 = $568 in X

$946 x 0.4 = $378 in Y.

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BaLLatris [955]

Answer: A. I and IV only

Explanation:

The relationship between bond prices and interest is an inverse one. This is because bonds have fixed rates so when for instance interest rates increase, the fixed rate of bonds will become less attractive as people would want to make the higher interest. They will therefore demand less of bonds and the prices will drop. The reverse is true.

Also, long term bonds are more affected by interest rate changes then short term bonds. This is because, as they have a longer term till maturity, they will be even less attractive when interest rates rise.

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Nutka1998 [239]

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6 0
3 years ago
An individual who previously worked as a salaried corporate attorney loses his or her job. Subsequently, the individual now work
Licemer1 [7]

This individual has experienced structural mobility

Structural mobility:

It happens when societal changes enable a whole group of people to move up or down the social class ladder. Structural mobility is attributable to changes in society as a whole, not individual changes.

In the first half of the twentieth century, industrialization expanded the U.S. economy, raising the standard of living and leading to upward structural mobility. In today’s work economy, the recent recession and the outsourcing of jobs overseas have contributed to high unemployment rates. Many people have experienced economic setbacks, creating a wave of downward structural mobility.

When analyzing the trends and movements in social mobility, sociologists consider all modes of mobility. Scholars recognize that mobility is not as common or easy to achieve as many people think. In fact, some consider social mobility a myth.

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4 0
1 year ago
Adjusting factory overhead LO P4
irga5000 [103]

Answer:

26,500 Under applied

Explanation:

<em><u>Lock-Tite Company</u></em>

Actual Factory Overhead 215,000

Factory overhead Indirect materials 15,000

Indirect labor 80,000

Other overhead costs 120,000

Direct Labor = 345,000

Predetermined Overhead = 70% of $ 345,000= $ 241,500

Actual Overhead = $ 215,000

Difference = Predetermined Overhead - Actual Overhead

                = 241,500- $ 215,000= 26,500 Under applied

We find the difference between actual overhead and applied overhead to find the underapplied ( overapplied overhead. If the actual overhead is less than applied overhead it is underapplied. But if the actual overhead is greater than applied overhead it is over applied.

Raw materials Opening $ 43,000

Add Materials Purchases 195000 ( 210,000 - 15000)

Less Raw materials Closing $ 52,000

Direct Materials Used 186,000

Direct Labor  345,000

FOH   215,000

Total Manufacturing Costs  746,000

Add Work in process  Opening 10,200

Less Work in process Closing 21,300

Add Finished goods  Opening 63,000

Less Finished goods Closing  35,600

Cost Of Goods Sold 762,300

8 0
3 years ago
Singh Co. reports a contribution margin of $960,000 and fixed costs of $720,000. (1) Compute the company’s degree of operating l
Alex

Answer: 1. Degree of Operating Leverage = 4

2. $384,000

Explanation:

1. Degree of Operating Leverage is calculated by dividing the Contribution margin by the Net Operating income.

Now, the Contribution margin is the difference between Price and Variable Cost. This means that if you remove fixed costs from it as well you get your profit.

Therefore 1. can be calculated thus,

Degree of Operating Leverage = Contribution Margin / Net Operating income

Degree of Operating Leverage = 960,000 / 960,000 - 720,000

Degree of Operating Leverage = 4

2. When Sales increases by a certain percentage we multiply that percentage by the Degree of Operating Leverage to find out how much Income will increase by.

Because sales went up by 15%, Singh Co. can expect that income would rise by,

= 15% * 4

= 60%.

Now income is Contribution margin - fixed costs so we have,

Income = 960,000 - 720,000

Income = $240,000

An increase of 60% would be

= 240,000( 1+ 60%)

=$384,000

$384,000 is the amount of income that Singh Co. can expect.

4 0
3 years ago
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