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Lyrx [107]
3 years ago
13

Investment Management Inc. (IMI) uses the capital market line to make asset allocation recommendations. IMI derives the

Business
1 answer:
algol133 years ago
5 0

Answer:

The expected return that IMI can provide subject to Johnson's risk constraint is 8.5%

Explanation:

Capital Market Line (CML)

Expected return on the market portfolio, E(r_m) = 12 %

Standard deviation on the market portfolio, σ_p = 20%

Risk-free rate, r_f = 5%

E(r_c) =  r_f + [  E(r_p)  - r_f ] × ( σ_c ÷ σ_p)

         = 0.05 + [ 0.12 - 0.05] × (0.10 ÷ 0.20)

= 8.5%

You might be interested in
To help developing countries expand their industrial base, some industrial countries have reduced tariffs on designated manufact
anzhelika [568]

Answer:

The correct answer is letter "B": generalized system of preferences.

Explanation:

Generalized System of Preferences or GSP is a set of preferential tariffs developed countries set to developing countries usually at a lower rate to boost the trade among those countries which mainly helps developing countries to increase the quality and number of their manufacturing companies.

3 0
3 years ago
Vincent operates a scenic tour business in Boston. He has one bus which can fit 50 people per tour and each tour lasts 2 hours.
mixas84 [53]

Answer:

There is some information missing, and when I looked for it I found similar questions but the demand was already given and the question was about Vincent's total daily income.

Passenger                  Price                  Daily demand

Adults                          $18                        70

Children                      $10                        25

Senior citizens            $12                        55

total                                                           150

total revenue per day = ($18 x 70) + ($10 x 25) + ($12 x 55) = $1,260 + $250 + $660 = $2,170

total operating costs per day = (150 / 50) x $450 = $1,350

operating income per day = $2,170 - $1,350 = $820

6 0
3 years ago
Ben has ​$2 comma 000 in his savings account and the bank pays an interest rate of 14 percent a year. The inflation rate is 9 pe
Alinara [238K]

Answer: After Tax Nominal Rate - 12.6%

After Tax Real Rate - 3.6%

Explanation:

<em>Real Rate of return is defined as the nominal interest rate less inflation. </em>

The After Tax Real Rate therefore caters for tax from the Nominal rate and then deducts Inflation.

The formula is,

= Nominal Rate( 1 - tax rate) - Inflation rate

= 14% ( 1 - 10% ) - 9%

= 14 ( 90% ) - 9

= 3.6%

The <em>Nominal Rate is simply the Real Rate plus Inflation</em>. The After tax real rate has already being found so the After Tax Nominal Rate is,

= 3.6 + 9

= 12.6%

5 0
3 years ago
Under the current/noncurrent method
sattari [20]

Answer:

a)A foreign subsidiary with current assets in excess of current liabilities will cause a translation gain (loss) if the local currency appreciates (depreciates).

Explanation:

6 0
3 years ago
A stock is expected to pay a dividend of $0.75 at the end of the year. The required rate of return is rs = 10.5%, and the expect
kipiarov [429]

Answer:

<em>$18.29</em>

Explanation:

It is very simple as per the question to calculate the current stock price.

The formula for calculating the Stock price is,

P = D/(r-g)

Hence, we calculate as follows,

Price = 0.75/(0.105-0.064)

Price = 0.75/0.041

<u><em>Price = $18.29</em></u>

<u><em /></u>

<u><em>Good Luck.</em></u>

5 0
3 years ago
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