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bonufazy [111]
3 years ago
11

ou manage an equity fund with an expected risk premium of 10% and a standard deviation of 14%. The rate on Treasury bills is 6%.

Your client chooses to invest $60,000 of her portfolio in your equity fund and $40,000 in a T-bill money market fund. What is the reward-to-volatility (Sharpe) ratio for the equity fund
Business
1 answer:
serg [7]3 years ago
4 0

Answer:

Reward to volatility ratio = 0.71

Explanation:

Given the expected risk premium = 10%

Standard deviation = 14%

The rate on treasury bills = 6%

The investment amount  that the client chooses to invest  = $60000

Expected return of equity = the expected risk premium  + The rate on treasury bills

Expected return of equity = 10% + 6% = 16%

Standard deviatin = 14%

Reward to volatility ratio = (expected return - risk free rate) /standard deviation

Reward to voltality ratio = (16% -6%)/14%

Reward to voltality ratio = 0.71

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Answer:

The buyer has agreed to waive his warranty rights by agreeing the clause of waiving the warranty rights under the contract.  

Explanation:

If the buyer and the seller agrees on the term that the risks and the rewards coming onwards would belong solely to the buyer and there will be no warranty claims acceptable related to this product. This is the limitation of the application of the Unifrom Commercial Code.

8 0
3 years ago
In a small manufacturing facility, one welder is needed for every 200 hours of machine-hours or fewer in a month. The welder is
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Answer:

C. $17,500

Explanation:

1,300 / 200 = 6.5

we are going to hire between 6 and 7 welder as we are given the requirement <u>"for every 200 hours or fewer in a month"</u> we should round above and not below: 7 welder. Besides, we cannot hire "half" or "quarter" of an employee therefore we have to move between integer solutions.

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3 years ago
A rise in the domestic real interest rate would cause a ________ in net exports and a ________ in the exchange rate.
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A rise in the domestic real interest rate would cause a fall in net exports and a RISE  in the exchange rate.

In general, businesses and consumers spend less when interest rates are high. This is because borrowing money costs more when interest rates are high. As a result, companies frequently turn to the stock market to raise money, which can cause stock values to decline.

An increase in interest rates causes the local currency to appreciate. In comparison to domestic goods and services, import prices decline. Exports see a decline in profitability and competition. Exports decline while imports rise, reducing the net export portion of total demand and spending.

To learn more interest rate would cause a fall in net exports and a RISE  about:

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5 0
1 year ago
Mason pays $251 monthly for auto insurance. He had an accident involving another car. His
Evgesh-ka [11]

Answer: Yes, the years worth of payments is more than the actual claim

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4 0
3 years ago
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The demand for labor curve shows:a. an inverse relationship between the real wage and the amount of laborhired.b. a positive rel
ankoles [38]

Answer:

The correct answer here is d.

Explanation:

Real wage is the nominal wages adjusted for price changes. It reflects the purchasing power earned by the workers.

There will be a direct and positive relationship between real wages and number of workers who are willing to work. This means when there is an increase in the real wages, more workers will be willing to work because they will be earning more. Reverse will be the situation in case of reduced real wages.

4 0
3 years ago
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