Answer:
The Treynor index for the stock will be 0.02.
Explanation:
The average return of the stock is 10%.
The average risk-free rate is 7%.
The standard deviation of the stock's return is 4%.
Stock's beta is given at 1.5.
Treynor index
= (Portfolio return- risk free return)/beta of the portfolio
=(0.10-0.07)/1.5
=0.03/1.5
=0.02
So, the Treynor index for the stock will be 0.02.
Answer: Option A
Explanation: In simple words, goodwill refers to the additional value that an organisation have from its identifiable assets due to its operations over a period of time.
In other words, it can be defined as an intangible asset which an organisation creates over a period of time while establishing the brand image. These assets are not depreciated but are tested for impairment every year. For example brands like apple, Reebok and McDonald have high goodwill in the market which attracts customers towards them
Thus, from the above we can conclude that the correct option is A.
Answer:
a) The expected return of equally weighed portfolio is 14.23%
b) The expected return of equally weighed portfolio is 16.45%, hence Variance = 1.596457%
Explanation:
See workings of a and b attached in a form of spreadsheet.
Interest on purchase consideration, the salary of partners, and interest on vendor capital are to be charged during the pre-incorporation period.
