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julsineya [31]
3 years ago
13

You want to create a portfolio equally as risky as the market, and you have $500,000 to invest. Information about the possible i

nvestments is given below: Asset Investment Beta Stock A $ 146,000 .91 Stock B $ 134,000 1.36 Stock C 1.51 Risk-free asset How much will you invest in Stock C
Business
1 answer:
azamat3 years ago
4 0

Answer:

Investment in stock C is $122450.3311 rounded off to $122450.33

Explanation:

A portfolio which is equally as risky as market should have a beta equal to the beta of the market as beta is a measure of the riskiness. The beta of market is always equal to 1. The formula for beta of a portfolio is as follows:

Portfolio beta = wA * Beta A + wB * Beta B + ... + wN * Beta N

Where w represents the weight of each stock in the portfolio.

Let investment in stock C be x

1 = 146000/500000 * 0.91 + 134000/500000 * 1.36 + x/500000 * 1.51

1 = 0.26572  +  0.36448 + 1.51x / 500000

1 - 0.6302 = 1.51x / 500000

0.3698 * 500000 = 1.51x

1844900 / 1.51 = x

x = $122450.3311 rounded off to $122450.33

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Inventory records for Herb's Chemicals revealed the following: March 1, 2016, inventory: 1,000 gallons @ $7.20 = $7,200 Purchase
amid [387]

Answer:

correct option is A. $5,087

Explanation:

given data

March 1, 2016, inventory: 1,000 gallons @ $7.20 = $7,200

Purchases                                        amount                 Sales  

Mar. 10               600 gals @ $7.25      4350          Mar. 5 400 gals

Mar. 16               800 gals @ $7.30       5840          Mar. 14 700 gals

Mar. 23              600 gals @ $7.35        4410          Mar. 20 500 gals

                                                                                    Mar. 26   700 gals

total                         3000 @7.267          21800

cost of good sold   2300 @ 7.267         16714

so

balance is =  3000 - 2300 = 700 @ 7.267

ending inventory is $5087

so correct option is A. $5,087

7 0
3 years ago
As a manager for a company that is looking to expand to China, what should your company focus on?
egoroff_w [7]

Answer:

The correct answer is letter "A": Building relationships with suppliers and business partners.

Explanation:

For a manufacturing company that is interested to start businesses abroad, it is important to find out if the operations processes can be carried out at least under the same characteristics as in the country of the firm's origin. Managers must analyze if all the components of their <em>supply chain</em> are likely to be found in the new region. Besides, managers should look for <em>local business partnerships</em> that will help the association adapt to the new market easier.

4 0
3 years ago
A. What is the significance of voting rights to the ordinary shareholders? What is a proxy? Why do proxy fights occur?
oksian1 [2.3K]

Answer:

a. What is the significance of voting rights to the ordinary shareholders? What is a proxy? Why do proxy fights occur?

Voting rights, to ordinary shareholders, is the upside of holding common stock, with the downside being that they have less preference of payment than bondholders, and preferred stock holders.

A proxy is a group of shareholder activists who attempt at enacting a particular change within the company. Proxy fights occur because proxies often meet resistance from the firm's current board.

b. Briefly explain the factors that influence the planning of the capital structure in practice.

There are many factors that influence the planning of the capital structure. For example, if interest rates are low, the board may plan for more debt and less equity, while the opposite would occur if interest rates are high.

In general terms, boards and managers tend to like debt because they represent the chance of leveraging the company, and a high leverage can increase returns to shareholders by a large margin if the economic performance of the firm is good.

c. ‘Bonus shares represent simply a division of corporate pie into a large number of pieces.’

Bonus shares are stock issued in place of dividends. In other words, when profits are distributed, stockholders get even more stock, instead of cash. Bonus shares, therefore, increase the amount of the firm's stock by the value of current profit, slicing the corporate pie into a larger number of pieces.

4 0
3 years ago
You would like to establish a trust fund that will provide $50,000 a year forever for your heirs. The trust fund is going to be
Finger [1]

Answer:

$1,818,181.81

Explanation:

Data provided:

Amount that will be provided a year = $50,000

Expected rate of return = 2.75%

Now,

The Present value of perpetuity is given as:

Present value of perpetuity = \frac{\textup{Annual return}}{\textup{Expected rate of return}}

on substituting the respective values, we get

Present value of perpetuity = \frac{\textup{50,000}}{\textup{0.0275}}

or

Present value of perpetuity = $1,818,181.81

Hence,

The amount that must be deposited today to fund this gift is $1,818,181.81

5 0
3 years ago
Which characteristics of capitalism provide an opportunity for entrepreneurship and allow both buyers and sellers to feel they m
vladimir2022 [97]
All the answers that apply are letters; a,b,c
7 0
3 years ago
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