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Vladimir [108]
3 years ago
6

Consider a risky portfolio. The end-of-year cash flow derived from the portfolio will be either $70,000 or $200,000 with equal p

robabilities of .5. The alternative risk-free investment in T-bills pays 6% per year. a. If you require a risk premium of 8%, how much will you be willing to pay for the portfolio?
Business
1 answer:
astra-53 [7]3 years ago
7 0

Answer:

$118,421

Explanation:

first we must calculate the expected value of the risky portfolio = ($70,000 x 0.5) + ($200,000 x 0.5) = $135,000

since your risk premium is 8% and the risk free rate is 6%m then you should discount the expected value by 8% + 6% = 14% to determine its current market price

= $135,000 / (1 + 14%) = $118,421

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send your client an email with a project and risk status. You ask for feedback on project performance. Which best practice shoul
Zolol [24]

Explanation:

Get to the point quickly and be concise., but don't be impersonal or abrupt. Keep your sentences short and clear. Include everything your client needs to know in the email. If you're just providing information and don't need a response, write “No response needed” at the end of the email.

7 0
3 years ago
Jacob needed money for some unexpected expenses, so he borrowed $5,890.25 from a friend and agreed to repay the loan in seven eq
Anna11 [10]

Answer:

OPTION C i.e 11%

Option A i.e 30.55 year

Explanation:

we know that capital can be calculated as

Capital = EMI \times PVIFA

capital = EMI \times \frac{(1+r))^n -1}{r (1+r)^n}

from the data given in question we can calculate the value of r

so

5890.2 = 1250 \times \frac{(1+r))^7 -1}{r (1+r)^7}

4.7122 = \frac{(1+r))^7 -1}{r (1+r)^7}

solving for r we get

r = 11%

option C

we know that

Total\ saving  =  cash flow \times FVIFA

                      = Cash\ flow \times \frac{(1+r)^n -1}{r}

from the data given we can evealueate the value of n

8,452,622 = 40,000 \times \frac{(1.11)^n -1}{0.11}

\frac{8452622}{40000}\times 0.11 = (1.11)^n -1

solving for n we get

n = 30.55 year.

Option A

4 0
3 years ago
_____ represent the interests of union members in their relations with their immediate supervisor and other members of managemen
Pavel [41]

Union stewards is what they call the one who represent the interest of the union members in their immediate supervisor and other members of the management. Union stewards are full-time employees at the workplace and generally are not paid by the union.

6 0
3 years ago
Suppose you have $1,000,000 today and starting a year from now you intend to spend this money over the next 30 years. Assume the
elena55 [62]

Explanation:

Here Initial amount = $10,00,000

Nominal Interest Rate = 9.2%

inflation  Rate = 5%

Real Interest Rate = 4%

in question it was asked to give in real then we will use the real discount rate to know annual spent amount

Present Value = PMT×PVIFA ( at 4% and 20 years)

Therefore, PMT = Present Value of Cash / PVIFA ( at 4% and 20 years)

= 1000000 / 13.5903

= $73581.75

Where,  PMT = Annual Spent Amount

PVIFA = Present Value interest Factor Annuity

7 0
3 years ago
Greg belongs to a society which makes very few distinctions between people and groups. This is reflected in his company, Sonata
almond37 [142]

Answer:

The correct answer is "Low on social stratification"

Explanation:

Social stratification refers to a pyramid in which are classify the persons depending on the position of the person or his family in a chain of command or social status.

3 0
3 years ago
Read 2 more answers
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