The following is part of the computer output from a regression of monthly returns on Waterworks stock against the S&P 500 index. A hedge fund manager believes that Waterworks is underpriced, with an alpha of 2% over the coming month.
Beta = 0.75
R-square = 0.65
Standard Deviation of Residuals = 0.06 (i.e., 6% monthly)
Assuming that monthly returns are approximately normally distributed, what is theprobability that this market-neutral strategy will lose money over the next month?
Assume the risk-free rate is .5% per month.
Answer:
0.33853
Explanation:
Given that, the expected rate of return of the market-neutral position is equal to the risk-free rate plus the alpha:
0.5%+ 2.0% = 2.5%
Hence, since we assume that monthly returns are approximately normally distributed.
The z-value for a rate of return of zero is
−2.5%/6.0% = −0.4167
Therefore, the probability of a negative return is N(−0.4167) = 0.33853
Answer:
The answer is: Tim forgot to get a building permit
Explanation:
In order to convert a mobile home into real property, these conditions must be met:
- homeowner must obtain a building permit
- the mobile home must be attached to a permanent foundation
- homeowner must obtain a Certificate of Occupancy
- you must have a record stating that the mobile home has been attached to a permanent foundation
Tim complied with three out of the four requirements needed to convert his mobile home into real property, but he forgot the first step.
Answer:
A
Explanation:
since shes a talented public speaker and enjoys travelling (A) would be a good fit
Answer:
$16.50
Explanation:
Note: The complete question is attached as picture below
We know that there is a total of 90 units of oil and 30 units is consumed in period 0.
So, in period 1, the consumption amount will be = 90-30=60 units.
So, Q1 = 192 - 8P
For 60 units, the price will be 60 = 192 - 8P
8P = 192 - 60
8P = 132
P = 132 / 8
P = 16.5
So, the price in period 1 is $16.50
