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Andreas93 [3]
3 years ago
13

You own a portfolio that has $3,100 invested in Stock A and $4,200 invested in Stock B. Assume the expected returns on these sto

cks are 11 percent and 17 percent, respectively. Required: What is the expected return on the portfolio? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)
Business
1 answer:
mina [271]3 years ago
8 0

Answer:

The expected return on portfolio is 14.45%

Explanation:

The expected return on portfolio is the weighted average return of the stocks that form up the portfolio. Thus, the weighted average return can be calculated by multiplying the weights of each stock in the portfolio by their expected return. The formula for portfolio return for a two stock can be written as,

Portfolio return = wA * rA + wB * rB

Where,

  • w represents the weight of investment in each stock in portfolio as a proportion of total investment in the portfolio
  • r represents the rate of return

Total investment in portfolio = 3100 + 4200 = $7300

Portfolio return = 3100/7300 * 0.11   +   4200/7300 * 0.17

Portfolio return = 0.1445 pr 14.45%

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4 0
2 years ago
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Potential investors, in analyzing the profit potential for a distressed property, generally consider a financial framework inclu
Misha Larkins [42]

Answer:

It is True that potential investors, in analyzing the profit potential for a distressed property, generally consider a financial framework including the acquisition phase, the holding period phase and the disposition phase

Explanation:

Acquisition is the process of gaining ownership or control of a real estate. It is usually sold by brokers to investors.

In the case of distressed property, there is always a holding period

Holding periods are usually targeted at 2-5 years, during which the asset that has been acquired is renovated.

The end of the holding period transitions to the beginning of the disposition phase.

During the disposition phase, the real estate which could be a distressed building is being disposed or handed over to the owners. At this phase, complete documentation is done and handed to both parties to endorse.

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3 0
2 years ago
A machine that cost $225,000 has an estimated residual value of $15,000 and an estimated useful life of 15,000 machine hours. Th
algol [13]

Answer:

$57,000

Explanation:

<u><em>Step 1 : Depreciation Rate</em></u>

Depreciation Rate = (Cost - Residual Value) ÷ Estimated Production

therefore,

Depreciation Rate = $14.00 per machine hour

<u><em>Step 2 : Depreciation expenses</em></u>

Depreciation expense = Depreciation Rate x Annual production

therefore

Year 1 = $42,000

Year 2 = $56,000

Year 3 = $70,000

Total    = $168,000

<em><u>Step 3 : Book Value</u></em>

Book Value = Cost - Accumulated Depreciation

                    = $225,000 - $168,000

                    = $57,000

Conclusion :

book value at the end of year 3 is $57,000

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3 years ago
What is an outstanding check?
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3 0
3 years ago
Ballard Company incurred a total cost of $8,500 to produce 400 units of pulp. Each unit of pulp required six (6) direct labor ho
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Answer:

$4,900

Explanation:

Given that,

Total cost at a production level of 400 units = $8,500

Each unit of pulp requires = 6 direct labor hours

Variable cost = $1.50 per direct labor hour

Total variable cost:

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= $1.50 × 6 × 400

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Total cost is sum total of total fixed cost and total variable cost.

Total cost = Total fixed cost + Total variable cost

$8,500 = Total fixed cost + $3,600

$8,500 - $3,600 = Total fixed cost

$4,900 = Total fixed cost

5 0
3 years ago
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