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Firlakuza [10]
4 years ago
6

​A stock's average return is 10 percent. The average risk-free rate is 7 percent. The standard deviation of the stock's return i

s 4 percent, and the stock's beta is 1.5. What is the Treynor index for the stock?
Business
1 answer:
svet-max [94.6K]4 years ago
4 0

Answer:

The Treynor index for the stock will be 0.02.

Explanation:

The average return of the stock is 10%.

The average risk-free rate is 7%.

The standard deviation of the stock's return is 4%.

Stock's beta is given at 1.5.

Treynor index

= (Portfolio return- risk free return)/beta of the portfolio

=(0.10-0.07)/1.5

=0.03/1.5

=0.02

So, the Treynor index for the stock will be 0.02.

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Explanation:

For any economy to grow there needs to be price stability in the economy as it helps investors plan their future spending amongst other things. This is why the Fed has the mandate to keep prices stable.

The Fed however, does not have to maintain the stability of prices in the stock market which can be a very volatile market where the volatility is one of the very ways to make gains.

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Savings accounts are usually not the best option when it comes to saving for retirement. Why? Most savings accounts do not pay e
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3 years ago
Read 2 more answers
Lois has a balance of $970 on a credit card with an APR of 24.2%, compounded monthly. About how much will she save in interest o
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Answer:

Lois will save $152.51 when she wil transfer her balance.

Explanation:

Amount to be paid in 1 year for original credit card is given as

P_1^{'}=P*(1+r_1)^t

Here P^{'}_1 is the amount to be paid after P is the balance which is 970, r_1 is the APR for first credit card which is 24.2% and t is compounding frequency which is 12 so

P_1^{'}=P*(1+r_1)^t\\P_1^{'}=970*(1+\dfrac{24.2}{12}\%)^{12}\\P_1^{'}=970*(1.0207)^{12}\\P_1^{'}=970*1.2707\\P_1^{'}=\$1232.61

Similarly for the second one the values are calculated as

P_2^{'}=P*(1+r_2)^t\\P_2^{'}=970*(1+\dfrac{10.8}{12}\%)^{12}\\P_2^{'}=970*(1.108)^{12}\\P_2^{'}=970*1.1135\\P_2^{'}=\$1080.10

The differnce of the two values is calculated as

P_1'-P_2'=1232.61-1080.10\\Difference=\$ 152.51

The difference is $152.51 which she could save.

7 0
3 years ago
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Answer:

The correct answer is the option C: shoulder.

Explanation:

<em>Shoulder seasons</em> is the name given, in tourist destinatios, to the season that includes <em>the time in between both spring and fall</em>, therefore high and low seasons. Common characteristics of this type of season is that<em> less people is founded there</em>, but there still are a bunch that moves the economy of the place, <em>also the prices are not too expensive</em> but nither too cheap and to add more, <em>the wheather can be mild</em> most of the time.  

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