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allochka39001 [22]
3 years ago
10

You invest $1,000 in a complete portfolio. The complete portfolio is composed of a risky asset with an expected rate of return o

f 16% and a standard deviation of 20% and a Treasury bill with a rate of return of 6%, what proportion ofyour $1,000 investment should be invested into theriskyasset and what proportion into the Treasury bill if you want your portfolio to have an expected value of $1,100 in 1 year? What will be the resulting standard deviation of your complete portfolio?
Business
1 answer:
gladu [14]3 years ago
7 0

Answer:

The rate of return on the risky asset is 16% and on treasury bill is 6% and we need a return of (1100-1,000)/1000= 10% or 0.1

If we think of x as the percentage investment in risky asset and 1-x as the investment in non risky asset we can mathematically find what proportion we need to invest in each asset to get this return.

16x+ 6(1-x)=10

16x+6-6x=10

10x=4

x=4/10

x= 0.4

This equation tells us that we should invest 40% in risky assets and 1-x which is 60% in treasury bills. We can test our answer by putting these values and see if the return is 10 %

(0.4*16)+(0.6*6)= Rate of return

Rate of return=10%

10% of 1000 = 100

100+1000=$1100

Explanation:

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Mays Corp. reported free cash flows for 2018 of $491 million and investment in operating capital of $321 million. Mays Corp. inc
Anon25 [30]

Answer: $975 million

Explanation:

Given the above details, we can solve for Earnings Before Tax and Interest with the following formula,

Operating Cash Flow = EBIT – Taxes on EBIT + Depreciation

Making EBIT the subject would turn it to be,

EBIT = Operating Cash Flow + Taxes on EBIT - Depreciation

We have all of the above except the EBIT and Operating Cash Flow.

Luckily we can solve for the Operating Cash Flow with the details given using,

Operating cash flow = Free Cash Flow + Investment in operating capital

Therefore,

= $491 million + $321 million

= $812 million

Operating cash flow is $812 million

Plugging it into the original formula we have,

EBIT = Operating Cash Flow + Taxes on EBIT - Depreciation

EBIT = $812 million + $309 million - $146 million

EBIT = $975 million

Earnings before Taxes and Interest is $975 million.

If you need any clarification do react or comment.

5 0
3 years ago
Employees and customers are treated like a family at State Street Coffee House. Jason and Jill, the owners, work to encourage un
qaws [65]

Answer: (D) Clan culture

Explanation:

The clan culture is one of the type of friendly type corporate environment in an organization and it is also known as collaborative culture. Clan culture is one of the element of corporate clan culture model.  

There are many types of advantage of clan culture in an organization are as follows:

  • Clear communication
  • Increase in company productivity
  • Increase in organization growth

According to the question, Jason and the Jill are the owner of the company an they always encourage and also motivate their employees. They also try to increase the job satisfaction among the employees and they try to built the clan culture in the company.

Therefore, Option (D) is correct.

3 0
3 years ago
An insurance applicant MUST be informed of an investigation regarding his/her reputation and
murzikaleks [220]

Answer:

Fair Credit Reporting Act is the correct answer.

Explanation:

7 0
3 years ago
The Village of Seaside Pines prepared the following enterprise fund Trial Balance as of December 31, 2020, the last day of its f
tigry1 [53]

The total net position for Village of Seaside Pines is $10000.

The closing entries for December 31st be:

Debit Charge for Sales and services $550000

Debit Transfer in from General Fund $115000

Debit Non operating revenues $4000

Credit Cost of sales and services $492000

Credit Depreciation expense $45000

Credit Administrative and selling expense $47000

Credit Non operating expense $40000

Credit Net position $45000

The Net Position section of the December 31 balance sheet will be prepared thus:

Capital asset acquired = $705000

Less: Accumulated depreciation = $45000

Less: Revenue bonds = $625000

Net investment in capital = $35000

Therefore, the total net position will be:

= $45000 - $35000

= $10000

Read related link on:

brainly.com/question/25221634

6 0
2 years ago
Robin Company has $100,000 of income before payment of $100,000 of reasonable salaries to its owners employees (who are in the 3
miv72 [106K]

Answer:

d. a., b, and c. all result in the same amount of tax.

Explanation:

The question is to determine the form of business

First we need to understand some terms

A C Corporation refers to a standard corporation as far as the IRS is concerned while the S Coproration is a corporation with a special tax status giving it some tax privileges with the IRS. We however, group organisations as either C or S based on the taxation code with the Internal Revenue Service

It should be noted that C corporation, S corporation and partnership all aply the same rate of tax. The only place of advantage or difference is in the area of how the tax is treated and the difference in their liability.

As such, the owner in the question is being taxed based on the 32% bracket and as such it affects all the forms of business structures. Therefore, Partnership. C corporation and S corporation will asll result in the same amount of tax.

6 0
3 years ago
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