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
Brilliant_brown [7]
4 years ago
11

UPS, a delivery services company, has a beta of 1.4, and Wal-Mart has a beta of 0.9. The risk-free rate of interest is 4% and th

e market risk premium is 6%. What is the expected return on a portfolio with 50% of its money in UPS and the balance in Wal-Mart? Group of answer choices
Business
1 answer:
Elena-2011 [213]4 years ago
7 0

Answer:

10.9%

Explanation:

to calculate the expected return of the portfolio, we first need to calculate the portfolio's beta:

the portfolio beta = (beta UPS stock x weight UPS stock) + (beta Walmart stock x weight Walmart) = (1.4 x 50%) + (0.9 x 50%) = 0.7 + 0.45 = 1.15

portfolio's expected return = risk free rate + (portfolio beta x market risk premium) = 4% + (1.15 x 6%) = 4% + 6.9% = 10.9%

You might be interested in
In a free enterprise system, competition benefits who?
maks197457 [2]
In a free enterprise system, competition is believed to benefit consumers and also workers. The idea is that the free enterprise system theoretically creates more jobs and also creates the most economic benefit and well being as a result of better prices and competition amongst firms in the system. 
5 0
3 years ago
Firms that strive for mindshare think not about the speed of an individual products development and launch, but rather about cre
Pie

Answer:

A) True

Explanation:

4 0
4 years ago
Read 2 more answers
What is one way that critical thinking can help in career exploration?
Llana [10]
Becoming aware of your assumptions and becoming open to different points of view can help you demonstrate respect for various approaches to work tasks and styles, making it easier for you to build relationships and be successful with others in your career.
8 0
3 years ago
Read 2 more answers
Country A can produce two goods: good X is labor-intensive and good Y is labor-intensive. As a result of international trade the
vekshin1

Answer:

Both goods are originally labor intensive, so we can conclude that the country has a lot of labor resources, while their capital resources should be rather limited. Since the world price of good X increases compared to the price of good Y, then the country will export larger amounts of good X since its price is relatively higher.

4 0
3 years ago
In order to establish criminal liability of the directors of a corporation:
Y_Kistochka [10]

Answer:

a prosecutor must establish that the directors had criminal intent

7 0
3 years ago
Other questions:
  • Hillsdale is considering two options for comparable computer software. Option A will cost $25,000 plus annual license renewals o
    13·1 answer
  • A promising strategy to help other countries increase food resources has been Select one:
    8·1 answer
  • A C corporation earns $ 8.80 per share before taxes. The corporate tax rate is​ 39%, the personal tax rate on dividends is​ 15%,
    6·1 answer
  • Expert systems: select one:
    12·1 answer
  • Kendra’s Quilts makes custom baby quilts embroidered with the baby’s name and date of birth. The company is considering the purc
    10·1 answer
  • A tax imposed on the assets of one who dies
    5·2 answers
  • Select the correct answer.
    7·1 answer
  • Question #3
    11·2 answers
  • ______________is the exercise of individual judgement, instead of formal rules, in making decisions.
    15·1 answer
  • What identifies the flow of critical business data
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!