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s2008m [1.1K]
2 years ago
11

Portfolio A has a beta of 1.0 and an expected return of 22%. Portfolio B has a beta of 2.0 and an expected return of 17%. The ri

sk-free rate of return is 2%. Is there an opportunity for arbitrage: (Please explain your answer)
Business
1 answer:
ArbitrLikvidat [17]2 years ago
4 0

Answer:

Yes, there is an opportunity.

Explanation:

Beta is an indicator of the risk of any portfolio.  The higher beta, the greater the risk. Therefore, the expected return of that portfolio should be higher.

Portfolio B has a higher Beta than portfolio A, but a lower expected return, so we say that the portfolio B is more expensive than it's value. So, there is an opportunity for arbitrage. You should sell the protfolio B and buy the portfolio A, and win the difference between both operations, with no risk.

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Kari is on a trip to italy. she has made a list of cities she would like to tour while she is there, as well as how much she exp
stealth61 [152]

Based on the amount budgeted and the cost of sight seeing, kari has almost exactly enough left in her budget to see genoa.

<h3>Which city should Kari see?</h3>

Exchange rate is the rate at which one currency is exchanged for another currency. In ths question, 1 dollar is exchange for 0.6859 euros.

  • The first step is to convert the amount budgeted to Euros: 585 x 0.6859 =  401.25
  • Cost in Euro of seeing Naples : 0.6859 x 71.06 = £48.74
  • Cost in Euro of seeing Venice : 0.6859 x 113.38 = £77.77
  • Total cost of the sightseeing =  £48.74 + £77.77 + £68.77+ £95.41 + £49.69  + £60.85 = £401.25

To learn more about exchange rate, please check: brainly.com/question/13717814

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4 0
2 years ago
The operational design of an illicit drug business can be divided into four stages of production and distribution: cultivation,
vesna_86 [32]
Retail distribution

The illegal drug business or trade primarily consists of the cultivation, manufacture, distribution and sales of prohibited drugs.

Cultivation and manufacture involves planting and harvesting prohibited drugs from plant sources (e.g. opium or marijuana) and processing the plant raw materials to produce the final product. For synthetic drugs, manufacture entails securing (sometimes by importation) of the chemicals required for the production of a certain drug (e.g. methamphetamine). Importation of the raw materials or final products might also be necessary to meet the demands.

With the final product at hand, the next step is to distribute and sell the drugs -- wholesale or retail. Wholesale distribution and sales involve large amounts (in bulk) of the illegal drugs while retail involves smaller amounts.  
5 0
3 years ago
Which of the following would not be a part of a company's human resources?
pychu [463]
The answer is D. All would be included as human resources
6 0
3 years ago
Wilson is viewed by his boss as driven, tenacious, and conscientious in the pursuit of his goals. these characteristics fit with
zepelin [54]

These are examples of <u>work-related</u> characteristics

3 0
3 years ago
She negotiated a price of $21,900 and will trade in her old car for $2,350. She will put another $850 with it and borrow the rem
lisabon 2012 [21]

Answer:

The monthly payment will be $434

Explanation:

Price of New car = $21,900

Price of old car exchanged = $2,350

Cash Payment = $850

Amount of Loan = $21,900 - $2,350 - $850

Amount of Loan = A = $18,700

Rate of interest = r = 6% = 0.06 = 0.005 per month

Number of total periods = 12 x 4 = 48

P = $18500 / { [ ( 1 + 0.005 )^48 ] - 1 } / [ 0.005 ( 1 + 0.005)^48 ]

P = $18500 / [ 0.2704891611 / 0.006352446 ]

P = $18500 / 42.58

P = $434.47

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3 years ago
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