Answer:
- (a) What are the portfolio weights of the three stocks in your portfolio?
Stock Weights
Apple 30%
Cisco 19%
Colgate 51%
TOTAL 100%
- (b) What is the expected return of your portfolio?
Stock Expected Ret. Portfolio
Apple 3,6%
Cisco 1,9%
Colgate 4,1%
Portfolio 9,6%
- (c) What are the new portfolio weights?
Stock Weights
Apple 30%
Cisco 24%
Colgate 45%
TOTAL 100%
- (d) what is the expected return of the portfolio at the new prices?
Stock Expected Ret. Portfolio
Apple 3,6%
Cisco 2,4%
Colgate 3,6%
TOTAL 9,7%
Explanation:
- (a) What are the portfolio weights of the three stocks in your portfolio?
To calculate the portfolio weights it's necessary to know the total value by Stock of the portfolio, with the information available about share prices and sharea outstanding is possible to find the total value of the portfolio and the weights of each share.
Stock Value Weights
Apple $309,000 30%
Cisco $200,000 19%
Colgate $530,000 51%
TOTAL $1,039,000 100%
- (b) What is the expected return of your portfolio?
The Expected Return of the portfolio it's related to the weights of each stock, with the information about the Expected Return and the Weights of each stock it's possible to know the Expected Return of the Portfolio.
Stock Exp Return Value Weights Exp. Ret. Portfolio
Apple 12% 309.000 30% 3,6%
Cisco 10% 200.000 19% 1,9%
Colgate 8% 530.000 51% 4,1%
TOTAL 1.039.000 100% 9,6%
When the value of each share changes, this impacts the total value of the portfolio and current weights, then changes the Expected Return of the portfolio.
Answer:
A) Accrual principle
B) Cost principle
C) Economic entity principle
Explanation:
Accrual principle: indicates that accounting transactions should be recorded in the accounting periods when they actually occur, rather than in the periods when there are cash flows associated with them.
Cost principle: according to this concept, a business should only record its assets, liabilities, and equity investments at their original purchase costs.
Economic entity principle: implies that the transactions of a business should be kept separate from those of its owners and other businesses.
Answer:
$15,000,000
Explanation:
The local government comes under the control of state directly. The amount received from local government should be reported in state's investment trust fund.
Answer:
It must reduce the firm's costs below that of its competitors while offering superior value.
Explanation:
Cost Leadership is the mechanism of establishing a competitive advantage by having the lowest cost of operation in the industry. This strategy is especially beneficial in a market where the price is an important factor.
Cost Leadership strategy: Increasing profits by reducing costs, while charging industry-average prices. Increasing market share through charging lower prices, while still making a reasonable profit on each sale because you've reduced costs.
As opposed to offering superior products or brand appeal, a cost-leadership company's greatest value to consumers tends to be low pricing. Therefore, if a competitor can reduce costs more, it will pose a substantial threat to a company's consumer base.
Alternative evaluation is what Marketers
characteristic the way the consumer make information to arrive at brand choices
as alternative evaluation. After buying
a product, the consumer will be satisfied or dissatisfied and will engage in post
purchase behaviour. The relationship between the consumer's expectations and
the product's perceived performance determines whether the buyer is satisfied
or dissatisfied with a purchase.
