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3 years ago

If expected return is less than required return on an asset, rational investors will ________.

1 answer:

6 0

Sell the asset, which will drive down the price and cause the expected return to reach the level of the required return.

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The correct answers are letters "A", "D", and "E": Use a business letter format; Send a separate letter to each interviewer; Mention something you liked about the interview.

Explanation:

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A) and goes further than necessary to ensure full coverage

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4 years ago

Classical economists traditionally believed that:

murzikaleks [220]

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3 years ago

Each of the following documents is used in the control of cash disbursements except a.cash register tapes. b.receiving reports.

GrogVix [38]

Answer: a. cash register tapes.

Explanation:

When you go to a shop and buy something at the till and the cashier prints a receipt and gives it to you, that paper is a cash register tape.

A cash register tape therefore shows the goods sold and the amount the goods were sold at. It is therefore not used as a method of control for cash disbursement which is cash going out of a business but rather for cash that is coming into the business.

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3 years ago

You currently own shares in Buckeye Mutual Fund (BMF). Your broker calls and recommends buying shares in a small-capitalization

GarryVolchara [31]

Answer:

Option D is the correct option

Explanation:

To find the optimal fund to combine with risk free rate of return, we will use Coefficient of variation,

Coefficient of variation(CoV) = Standard Deviation/Expected Return

CoV of Buckeye = 14%/20% = 0.7

CoV of Wolverine = 11%/12% = 0.9167

So, higher the CoV higher the risk, we will take Buckeye to combine with Risk Free Return.

Hence, Option A

- Required target return of portfolio = 22%

Risk Free return = 8%

Buckeye Return = 20%

Let the weight of Buckeye be X ,& weight of risk free be (1-X)

Required return = (WRF)*(RRF) + (WB)*(RB)

22 = (1-X)(8) + (X)(20)

22 = 8-8X + 20X

14 = 12X

X = 1.17

SO, weight of Buckeye is 1.17 or 117%

while weight of Risk free is -0.17 (1-1.17) or -17%

Hence, ans is OPTION D

7 0

3 years ago

If expected return is less than required return on an​ asset, rational investors will​ ________.

If expected return is less than required return on an asset, rational investors will ________.