When positioning products relative to competitors' offerings, firms typically are most successful when they focus on opportuniti
1 answer:
You might be interested in
Answer:
11.11%
Explanation:
<em><u>The full question with table is attached.</u></em>
<em><u /></em>
We need the rate of return formula using Capital Asset Pricing Model (CAPM). The formula is:
Where
R is rate of return (what we need)
is risk-free return rate (5% = 0.05)
is the market rate of return (11% = 0.11)
To get , we take the weighted average of the portfolio.
Weight of Stock A = 1,075,000/3,000,000 = 0.3583
Weight of Stock B = 675,000/3,000,000 = 0.225
Weight of Stock C = 750,000/3,000,000 = 0.25
Weight of Stock D = 500,000/3,000,000 = 0.1667
Portfolio Beta = (0.3583*1.2) + (0.225*0.50) + (0.25*1.40) + (0.1667*0.75) = 1.02
Now, we calculate rate of return using CAPM formula:
That is 11.12%, or from answer choice, it is <u>11.11%</u>
Answer:
The percentage loss will be "-9.08%". The further explanation is given below.
Explanation:
The given values are:
Invested amount
= 20,000
Price of purchase
= $66
Total number of shares
= 500
The borrowed amount will be:
=
=
When the price increase to 69.63, the gain will be:
=
= ($)
The total gain will be:
=
=
Increase in percentage will be:
=
= %
Whereas if price stays quite well at $66, there is really no increase, so the percentage growth would be 0%.
If the price declines toward a loss of 62,37 per share:
=
=
Now,
The total loss will be:
=
=
The percentage loss will be:
=
= (%)