Disaster recovery typically looks at the _________

A stock has a beta of 1.90 and an expected return of 15 percent. A risk-free asset currently earns 3.6 percent. a. What is the e

anastassius [24]

Answer:

a. E(Rp) = W1 * E(R1) + W2 * E(R2) : W = Weight of risk free asset in portfolio , E(R) = Return of risk free asset

Expected Return of Portfolio = 0.5*3.6 + 0.5*15

Expected Return of Portfolio = 1.8 + 7.5

Expected Return of Portfolio = 9.3%

b. When a portfolio is composed of one risk free asset and one another risky stock

бp = W1 * б1

The S.D. of a stock or portfolio in this case as given by Beta

0.95 = W1 * 1.9

W1 = 0.95/1.9

W1 = 50%

Weight of risk free asset = 1 - 0.5

Weight of risk free asset = 50%

c. E(Rp) = W1 * E(R1) + W2 * E(R2)

7 = W1 * 3.6 + W2 * 15

With Trial and error method: W1 = 0.7, W2 = 0.3

Beta of Portfolio = 0.3 * 1.9

Beta of Portfolio = 0.57

d. Beta of Portfolio = Weight of risky asset * Beta of risky stock

3.8 = W * 1.9

W = 3.8/1.9

W = 2

Weight of risk free asset = 1 - 2

Weight of risk free asset = -1.

3 0

3 years ago

Paper Submarine Manufacturing is investigating a lockbox system to reduce its collection time. It has determined the following:

Ostrovityanka [42]

Answer:

-1,185,282.35‬

Explanation:

The average daily collections are the average number of payments times the average value of a payment, so:

Average daily collections = =355 * 945

Average daily collections = $335,475

The present value of the lockbox service is the average daily receipts times the number of days the collection is reduced, so:

PV = (4 day reduction)( $335,475)

PV = $1,341,900‬

The daily cost is a perpetuity. The present value of the cost is the daily cost divided by the daily interest rate. So:

PV of cost = (.3*355)/.00068

PV of cost = $106.5/.00068= $156,617.65

The firm should take the lockbox service. The NPV of the lockbox is the cost plus the present value of the reduction in collection time, so:

NPV = $156,617.65 - 1,341,900

NPV = -1,185,282.35‬

3 0

3 years ago

Read 2 more answers

On July 1, Bramble Corporation purchases 670 shares of its $6 par value common stock for the treasury at a cash price of $9 per

user100 [1]

Answer and Explanation:

The journal entries are shown below:

On July 1

Treasury stock Dr (670 shares × $9 per share) $6,030

To Cash $6,030

(Being the purchase of treasury stock is recorded)

For recording this we debited the treasury stock as it increased the treasury and credited the cash as it decreased the assets

On Sep 1

Cash Dr (420 shares × $14 per share) $5,880

To Treasury Stock (420 shares × $9 per share) $3,780

To Additional paid in capital - Treasury stock $2,100

(Being the resale of treasury stock is recorded)

For recording this we debited the cash as it increased the assets and credited the treasury stock and additional paid in capital as the sale is made

4 0

3 years ago

Which of the following is NOT a part of reviewing and revising the financial plan?

kvasek [131]

Explanation:

hehehehheehheheehehhehehheeheheheh

6 0

3 years ago

As a corporation grows in size of employment, perhaps becoming influential nationally or globally, what public perception is dev

Korolek [52]

As a corporation grows in size of employment C. perceived permanence is developed.

A enterprise, every so often called a C corp, is a legal entity it really is cut loose its proprietors. corporations could make a income, be taxed, and may be held legally liable. corporations offer the most powerful safety to its proprietors from personal legal responsibility, but the value to form a enterprise is higher than other structures.

A employer is a standard reference to a enterprise whereas a corporation is a reference to a particular type of commercial enterprise entity. A corporation is owned through its shareholders while a organization may be owned either by the commercial enterprise owner in complete (sole proprietorship), several people

Agencies offer the most powerful safety to its owners from private liability, however the cost to shape a agency is higher than different systems. groups additionally require greater enormous file-keeping, operational techniques, and reporting.

Learn more about corporation here: /brainly.com/question/2514694

#SPJ1

5 0

2 years ago

Disaster recovery typically looks at the __________. Select one: