1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Degger [83]
3 years ago
11

Suppose that all stocks can be grouped into two mutually exclusive portfolios (with each stock appearing in only one portfolio):

growth stocks and value stocks. Assume that these two portfolios are equal in size (market value), the correlation of their returns is equal to 0.6, and the portfolios have the following characteristics: The risk free rate is 3.5%. The expected return on the market portfolio (which is a 50-50 combination of the value and growth portfolios) is closest to: Select one: a. 13.5% b. 19.0% c. 12.0% d. 15.0%
Business
1 answer:
Otrada [13]3 years ago
6 0

Answer:

option a 13.5%

Explanation:

                       Expected

                                Return           Volatility

Value Stocks           0.12             14%

Growth Stocks   0.15            24%

<u>Solution</u>

Expected return on market portfolio = Weight of value stock * return of value stock + weight of growth stock * value of growth stock

Expected return on market portfolio = 0.5 * 0.12 + 0.5 * 0.15

Expected return on market portfolio = 0.06 + 0.075

Expected return on market portfolio = 0.135 or 13.5%

You might be interested in
The difference between Karson's behavior at the end of the 12 weeks versus the promise to cure Karson of ADHD can be described a
pychu [463]

Answer:

A. Expectation interest.

Explanation:

Expectation interest is explained as the party of interest being in a good position in the point or financial angles during a business dealing. Here he/she is said to have a good stance of a deal or a contract been contacted for. Sometimes, it is seen to be triggered by net profits and losses less any costs or losses, which are sometimes tool in weighing the reasonable measure of damages. Therefore, when no contracts are be agreed on, determination must be made as to whether or not one party benefited from contact with the other party.

5 0
4 years ago
If during 2011. the country of Sildavia recorded a GDP of $65 billion. interest paymentsof $15 billiorn imports of $13 billion.
Helen [10]

Answer:

B. $36 billion

Explanation:

Since we were asked to calculate Wages. We can't use the Expenditure method of GDP. Method to be used would be the Income approach. In doing so, the values of export and import would be excluded. Therefore,

Given that

GDP = 65 billion

Profits = 7 billion

Rent = 7 billion

Interest payments = 15 billion

Recall that,

GDP = sum of income earned (profits, wages, rents, interests)

Thus,

Wages = GDP - Profits + rents + interests

= 65 - (15 + 7 + 7)

= 65 - 29

= 36 billion

Hence, wages during 2011 was $36 BILLION.

Note: Parameters used are based on the information in the question. It is important to note that income earned when using income approach could be more than the 4 stated parameters of wages, rent, profits and interests.

6 0
3 years ago
The adjustment to the weighted-average shares for retired shares is the same as for issuing new shares except: A. The shares are
solmaris [256]

Answer: The shares are deducted rather than added

Explanation:

The adjustment to the weighted-average shares for retired shares is the same as for issuing new shares when the shares are added rather than deducted, the shares are treated as being acquired at the end of the year and the shares are treated as being acquired at the beginning of the year.

Therefore, the adjustment to the weighted-average shares for retired shares is the same as for issuing new shares except when the shares are deducted rather than added.

4 0
3 years ago
John would like to move from the suburbs into the city, but the rent in the city is very high. John has found an apartment he re
gavmur [86]
He should just stay where he is and save up his money.Or he can try to find a different apartment.
4 0
3 years ago
Matthew​ Liotine's Dream Store sells water beds and assorted supplies. His​ best-selling bed has an annual demand of 410 units.
never [62]

<u>Given:</u>

Annual demand = 410 units

Ordering cost = $41

Holding cost = $5 unit per year

<u>To find:</u>

Number of units to be ordered each time an order is placed

<u>Solution:</u>

On calculating the number of units,

\Rightarrow \sqrt{(\frac{2(390)(38)}{5})} \rightarrow\sqrt{\frac{780\times38}{5}}= 76.99

Therefore, to minimize the total cost, approximately 77 units should be ordered each time an order is placed.

5 0
4 years ago
Other questions:
  • Kelsey Gunn is the only employee of Arsenault Company. His pay rate is $23.00 per hour with an overtime rate of 1½ times for hou
    8·1 answer
  • Allison has been hired to work for an auto repair business. she is twenty-four years old. the auto repair business employs fifty
    7·1 answer
  • __________ is the only variable which will decrease the amount brought to the market (quantity supplied) if all other variables
    5·1 answer
  • Which of the following pairs of accounts could not appear in the same adjusting entry? a. Interest Income and Interest Expense b
    5·1 answer
  • The term that most accurately describes the international economy today isa. unilateralism.b. isolationism.c. interdependence.d.
    7·1 answer
  • Why are labels so important when we are trying to influence or persuade?<br> Question 1 options:
    5·1 answer
  • Kelly Addison is a designer clothing buyer for a chain of department stores. She has gone through several negotiation certificat
    7·1 answer
  • While solitary negative reactions or unjustified suggestions for change have the potential to dissipate discourse rather than bu
    10·1 answer
  • What will happen to a typical isoquant if robots become increasingly good at doing manual and mental labor?A. Isoquants will bec
    14·1 answer
  • under the income approach to gdp, the wages, salaries, and benefits paid by businesses and government fall under the category of
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!