What do you call a spending plan that we create to help manage our money?

You have $106,000 to invest in a portfolio containing Stock X and Stock Y. Your goal is to create a portfolio that has an expect

Helga [31]

Answer: ER(P) = ERX(WX) + ERY(WY)

16 = 13(1-WY) + 9(WY)

16 = 13 - 13WY + 9WY

16 = 13 - 4WY

4WY = 13-16

4WY = -3

WY = -3/4

WY = -0.75

WX = 1 - WY

WX = 1 - (-0.75)

WX = 1 + 0.75

WX = 1.75

The amount to be invested in stock Y = -0.75 x $106,000

= -$79,500

The Beta of the portfolio could be calculated using the formula:

BP = BX(WX) + BY(WY)

BP = 1.14(1.75) + 0.84(-0.75)

BP = 1.995 - 0.63

BP = 1.365

Explanation: The expected return of the portfolio is equal to expected return of stock X multiplied by the weight of stock X plus the expected return of stock Y multiplied by weight of security Y. The weight of security Y is -0.75. The weight of security X is equal to 1 - weight of security Y. Thus, the weight of security X is 1.75 since the weight of security Y is negative. The amount to be invested in security Y is -0.75 x $106,000, which is equal to -$79,500

The Beta of the portfolio equals Beta of stock X multiplied by weight of stock X plus the Beta of stock Y multiplied by weight of stock Y. The weights of the two stocks have been obtained earlier. Therefore, the Beta of the portfolio is 1.365.

6 0

3 years ago

The town of Chester has an economy composed entirely of two equally sized food companies. Both company Q and company R produce p

ExtremeBDS [4]

Answer:

C) abandon the production of jam to fully specialize in the production of peanut butter and then trade with Company Q for jam.

Explanation:

According to different theories about trade specialization, a company or even a country should specialize in producing only those products that they can make better than their competition, i.e. have a comparative or absolute advantage in their production.

In this case, since Company R has a comparative advantage in the production of peanut butter, it should specialize in producing only that. In case they need jam, they should trade with Company Q in order to get some jam. Eventually Company Q will only produce jam since they have a comparative advantage in jam production.

8 0

4 years ago

Wilma is a salesperson with Broker Fred. Wilma arranges for a listing with a seller. When Fred accepts the listing, a contract a

bazaltina [42]

The relationship between Wilma and the seller is called a sub-agent relationship

<h3>What is a sub-agent relationship?</h3>

A sub-agent relationship happens when the agent or broker brings a buyer to purchase a property from him whereaS he is not the property's listing agent.

In conclusion, the relationship between Wilma and the seller is called a sub-agent relationship