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Vladimir [108]
4 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]4 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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on july 1, 2024, a company acquired equipment. the company paid $187,500 in cash on july 1, 2024, and signed a $750,000 noninter
MAXImum [283]

$700,935 and debit discount on notes payable a working year is the correct answer among the group of choices.

<h3>What are debits exactly?</h3>

A debit is an accounting system item that demonstrates a gain in assets and a decrease in liabilities. Debits and credits are the two categories into which the entries fall in basic accounting. Debits are always offset by credit entries.

<h3>Is debit debt or credit?</h3>

A credit increases the balance in a liabilities account whereas a debit decreases it. In this manner, the credit for the loan would equal the debit for the cash on hand account, increasing the long-term debt account by the same amount.

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5 0
1 year ago
Which kind of stock is most affected by changes in risk aversion? (In other words, which stocks see the biggest change in their
11Alexandr11 [23.1K]

Answer:

High beta stocks

Explanation:

High beta stocks are mostly affected by changes in risk aversion. Beta measures a stock's volatility in comparison to the overall market. High-beta stocks are supposedly riskier but these stocks provide potentials for higher return, low-beta stocks have lower risk and also lower returns.

In simple terms, high beta stocks is much more volatile than the index it's being measured against.

7 0
3 years ago
The budgeted production of Taurus, Inc. is 10,000 units per month. Each unit requires 40 minutes of direct labor to complete. Th
Nonamiya [84]

Answer:

B) 466,667

Explanation:

10,000*40= 400,000/60 (converting in to Hours)

=6,666.66

6,666.66*70= USD 466,666

4 0
3 years ago
Match the type of teams to the scenario that portrays each of them.
gavmur [86]

Matching the type of teams to the best scenarios that portray them will be as follows:

Types of Teams                   Portraying Scenarios

Traditional work teams       <em>C. At Tina's workplace, ...</em>

Flexible work teams            <em>A. Sara loves working ...</em>

Self-managed teams           <em>B. At Sam's workplace, ...</em>

Lean production teams      <em>D. Roy and his team members ...</em>

The characteristics of teams are enumerated below:

  • Traditional work teams: individuals have shared processes and goals.
  • Flexible work teams: there is greater flexibility in the working pattern.
  • Self-managed teams: individuals are focused on their different objectives.
  • Lean production teams: make quick decisions that benefit the company.

Thus, various work teams can be instituted, with each type achieving specific purposes.

Learn more about work teams at brainly.com/question/18122514

3 0
2 years ago
Suppose that market demand is Q = 660 – 12P and marginal cost is MC = 5. The consumer surplus in a perfectly competitive market
Ad libitum [116K]

Answer: 15000; 3750

Explanation:

From the question,

Q = 660 – 12P

MC = 5

The consumer surplus in a perfectly competitive market will be:

P = MC

Therefore, P = 5

Q = 660 - 12P = 660 - 12(5) = 660 - 60 = 600

Consumer surplus = 1/2 × (55 - 5) (600)

= 1/2 × 50 × 600

= 15,000

For monopoly, MR = MC

Total Revenue = P × Q

Since Q= 660 - 12P

P = (660 - Q)/12

TR = P × Q

= (660 - Q)/12 × Q

= (660Q- Q²)/12 × Q

MR = (660 - 2Q)/12

MR = MC

(660 - 2Q)/12 = 5

(660 - 2Q) = 5 × 12

660 - 2Q = 60

2Q = 660 - 60

2Q = 600

Q = 600/2

Q= 300

Since P =(660 - Q)/12

= (660 - 300)/12

= 360/12

= 30

Consumer surplus = 1/2 × (55 - 30) (30)

= 1/2 × 25 × 300

= 3750

Therefore, the answer is 15000; 3750

7 0
3 years ago
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