Answer:
Asset U
Explanation:
Reward-to-volatility ratio for Asset Q = Expected return / standard deviation
Reward-to-volatility ratio for Asset Q = 6.5% / 5.5%
Reward-to-volatility ratio for Asset Q = 1.1818
Reward-to-volatility ratio for Asset U = Expected return / standard deviation
Reward-to-volatility ratio for Asset U = 8.8% / 5.5%
Reward-to-volatility ratio for Asset U = 1.6
Reward-to-volatility ratio for Asset B = Expected return / standard deviation
Reward-to-volatility ratio for Asset B = 8.8% / 6.5%
Reward-to-volatility ratio for Asset B = 1.3538
The investor should prefer Asset U because its has the highest reward to volatility ratio among the three options.
Answer:
Statistics is used to determine what risk an insured poses to an insurance company, what percentage of policies is likely to pay out, and how much money a company can expect to pay out in claims
Answer:
The opportunity cost of that decision is - $250,000
Explanation:
For computing the opportunity cost, we have to use the formula of opportunity cost which is shown below:
= Return of project which is not chosen - the return of a chosen project
= $750,000 - $1,000,000
= - $250,000
Since in the question, it is given that the chosen project is X so we write the project X amount in the formula and the not chosen project of-course is Y.
Hence, the opportunity cost of that decision is - $250,000
Answer:
Variable cost per unit = $4.60
Explanation:
To calculate the element of variable cost in a mix cost using high-low method, we need to take the cost of the highest activity level and subtract the cost of the lowest activity level from it and divide the answer by the difference between the highest and the lowest activity levels.
<u>High-low method</u>
- Variable cost per unit = (Highest Activity Cost - Lowest Activity Cost) / (Highest Activity Units - Lowest Activity Units)
- Variable cost per unit = (66436 - 60226) / (2660 - 1310) = $4.60 per unit
