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
Leya [2.2K]
3 years ago
10

Stock A has an expected return of 10% and a standard deviation of 20%. Stock B has an expected return of 13% and a standard devi

ation of 30%. The risk-free rate is 5% and the market risk premium, rM- rRF, is 6%. Assume that the market is in equilibrium. Portfolio AB has 50% invested in Stock A and 50% invested in Stock B. The returns of Stock A and Stock B are independent of one another, i.e., the correlation coefficient between them is zero. Which of the following statements is CORRECT? a. Portfolio AB's required return is 11%. b. Portfolio AB's standard deviation is 25%. c. Stock A's beta is 0.8333. d. Stock B's beta is 1.0000. e. Since the two stocks have zero correlation, Portfolio AB is riskless.
Business
1 answer:
Nina [5.8K]3 years ago
3 0

Answer:

Expected Portfolio return = 0.5(10)+0.5(13)= 5+6.5=11.5%

Expected Portfolio SD= 0.5(20)+0.5(30)= 25%

Beta of A, 10= 5+B(6)

5=6B

B= 5/6= 0.833

B of B, 13=5+B(6)

8=6B

B=8/6

B=1.33

b. Portfolio AB's standard deviation is 25%

c. Stock A's beta is 0.8333

These two statements are correct

Explanation:

You might be interested in
One of the most important in-store factors is the salesperson. This influence can be understood in terms of ________ theory, whi
amm1812

Option (b), The salesperson is one of the most crucial in-store elements. The exchange theory, which emphasizes that each participant provides to the other and anticipates receiving something in return, can be used to explain this influence.

<h3>What does exchange theory actually mean?</h3>

According to the social exchange hypothesis, two people's relationships grow as a result of a process of cost-benefit analysis. In other words, it's a statistic designed to measure the amount of effort a person expends during a face-to-face conversation.

<h3>What are the basic tenets of the exchange theory?</h3>

The basic tenet of the theory of social trade is the concept of costs and benefits. This suggests that people's decisions and behaviors are influenced by their estimations of cost and reward. Costs are the unfavorable outcomes of a decision, including time, money, and energy. Social interactions produce benefits, which are rewards.

Learn more about exchange theory: brainly.com/question/29611150

#SPJ4

6 0
1 year ago
One of your customers is delinquent on his accounts payable balance. you've mutually agreed to a repayment schedule of $630 per
larisa [96]

Answer:

27.14  months

Explanation:

to calculate how long it will take to pay the loan, we can use an excel spreadsheet and the NPER function:

=NPER(rate,payment,-loan)

  • payment = 630
  • rate = 1.03
  • loan balance = 14,850

=NPER(1.03%,630,14850) = 27.14  months

5 0
3 years ago
On January 1, 2018, Race Corp. acquired 80% of the voting common stock of Gallow Inc. During the year, Race sold to Gallow for $
andreyandreev [35.5K]

Answer:

Consolidated income: 954,800 dollars

Explanation:

Gallow income x race participation:

    $   204,000    x   80%   = $ 163,200

The gross profit in the infra-entity transaction will be eliminated

$ 450,000 - $ 330,000 = $ 120,000 gross profit

15% remains at Gallow so: $ 120,000 x 15% = $ 18,000 gross profit for the unsold inventory.

We now multiply by Race participation: $ 18,000 x 80% = $ 14,400 unrealized gain.

Consolidated income:

Race income:   806,000

Gallo income    163, 200

unrealized gain (14, 400)

Total:                954,800

3 0
3 years ago
During its 1st month of business, Noodlecake's cash increased by receiving $5,000 from issuing common stock to its owners, borro
Anestetic [448]

Answer:

Noodlecake

On its statement of cash flows, Cash Provided by Operating Activities equals $__1,000____ Cash from Investing Activities equals $__(3,000)______ Cash from Financing Activities equals $_7,000______  and the Change in Cash equals $_5,000______ Be sure to use parentheses around the amount if it is a cash outflow, e.g. $(1,000)

Explanation:

a) Data and Calculations:

Financing activities:

Common stock $5,000

Bank loan            2,000

Net cash           $7,000

Operating activities:

Cash from customer $3,000

Cash to employees   (2,000)

Net cash                    $1,000

Investing activities:

Equipment     ($3,000)

Net cash from cash flows = $5,000

The net cash from cash flows or the change in cash flows is the summation of the changes in the operating, investing, and financing activities of Noodlecake during the period under review.  It shows by how much the cash has increased or decreased when compared to the beginning balance, which can be zero as in this case.

3 0
3 years ago
If the a=4 find the value a2<br>​
Rashid [163]

Answer:

If a = 4 it would be 4 x 2 = 8

Explanation:

Have a nice dayy/nightt

3 0
3 years ago
Other questions:
  • In what circumstances would business expenses be passed on to a client?
    12·2 answers
  • There are four steps in solving one’s personal financial challenges
    15·2 answers
  • Lily, an upperclassman at Riverside College, hopes to start her own business after graduation. In an effort to learn as much as
    14·1 answer
  • When the marginal benefit of an output exceeds the marginal cost?
    7·1 answer
  • Which of the following is a disadvantage of equity capital?
    13·1 answer
  • Suppose that the value of an investment in the stock market has increased at an average compound rate of about 5% since 1912. It
    15·1 answer
  • The natural rate of unemployment- also called full employment- means
    12·1 answer
  • In 2022, internal auditors discovered that Axel Corp., had debited an expense account for the $2,090,000 cost of a machine purch
    7·1 answer
  • Which of the following editors would handle a copyright issue?
    15·1 answer
  • A machine with a cost of $85,000 has an estimated residual value of $5,000 and an estimated life of 5 years or 20,000 hours. Wha
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!