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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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National Bank quotes the following for the British pound and the New Zealand dollar:​ ​ Quoted Bid Price Quoted Ask Price Value
Rzqust [24]

Answer:

Explanation:

$10,000 to start with.

From USD to pound - (GBP/USD = 1.62). Pounds = 10,000 * (1/1.62) = GBP 6,172.84

From GBP to NZD - (GBP/NZD = 2.95). NZD = 6,172.84 * 2.95 = NZD 18,209.88

From NZD to USD - (NZD/USD = 0.55). USD = 18,209.88 * 0.55 = USD 10,015.43

$10.015.43>$10,000

Profit from implementing the strategy is 10,015.43-10,000 = $15.43

4 0
3 years ago
Read 2 more answers
Which of the following is NOT one of the four ways in which an agency relationship can arise?a. agency by agreement b. agency by
tatiyna

Answer: Agency by federal law

Explanation: An agency relationship is the relationship between the principal and agent, in which the principal gives the agent legal authority to act on his or her behalf while dealing with a third party.

Ratification, estoppel, operation of law and agreement are the ways through which such relationship can be formed.

4 0
2 years ago
MARKING BRAINIEST
Luba_88 [7]

Answer:

Sales

Explanation:

S stands for sales. The moving averages formula uses sales figures from the previous periods to forecasts future sales.  For example,

say, sales for 2015 were 100; 2016 were 120; 2017 were 110; and 2018,..130. Using the formula, the forecast for 2019 will be

Forecast 2019 = Sales 2015 + Sales 2016+ Sales 2017+ sales 2019 / 4

Forecast 2019 = 100 + 120 +110 + 130 / 4

Forecast 2019=115

8 0
2 years ago
Read 2 more answers
Ethan founded and operated a lunch-only catering business, which specialized in providing fresh, delectable, eat-at-your-desk lu
Tom [10]

Answer:

Sole Proprietorship.

Explanation:

This is an example of a Sole Proprietorship. It is a form of business owned by one person . The owner provides the capital (usually not that large) , has unlimited liability in the business, and the life of the business depends on the existence of the owner; if he falls ill or passes away and there's no succession plan, the business would dissolve.

5 0
3 years ago
Which of the following statements about investing is<br> TRUE?
Pavel [41]

Answer:

The correct answer is b) Investing is riskier than putting money in a savings accounts.

Explanation:

Generally, companies or individuals make investments to obtain benefits in a longer-term, these monetary investments are made to increase profits.

The investments can generate profits, and also, can generate losses, one of the disadvantages of the investment being the uncertainty that the product or project in which you are investing has the desired results. Therefore, many people believe that one way of not putting their money at risk is to save money instead of investing it.

Through savings accounts the person only deposits the money, these funds will be at your disposal whenever you want, also, this money will generate interest according to the amount saved.  

<em>I hope this information can help you.  </em>

5 0
3 years ago
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