Answer:
Expected return is: 7.37% and the Standard deviation is: 24.96%
Explanation:
Correlation between fund S&B=0,0667
Standard Deviation of Fund S=41%
Standard Deviation of Fund(B)=30%
E(R) of Stock Fund S=12%
E(R) of Stock Fund B=5%
Covariance between the funds = Standard Deviation of Fund(B) × Standard Deviation of Fund S × correlation between these funds
Cov = 0.41 × 0.30 × 0.0667 = 0.008204
Now minimum variance portfolio is found by applying:
W min(S)=(SDB)^2-Cov(B,S) / ((SDS)^2+(SDB)^2-2Cov(B,S)
W min(S) = 0.338431
W min(B) = 1-0.338431=0.661569
1) E(r)min= 0.338431 × 12% + 0.661569 × 5% = 7.37%
2) Standard Deviation:
SD Min = (Ws^2XSDs^2+Wb^2XSDb^2+2XWsWb*Cov(s,B)^1/2
SDmin=(0.338431^2 × 0.41^2 + 0.661569^2 × 0.3^2 + 2 × 0.338431 × 0.661569 × 0.008204)^1/2
SDmin=24.96%
Answer:
the portfolio´s beta is 1.65
Explanation:
when the individual calculation of beta has been given, is possible to aggregate them as a weigthed average, so it is possible to apply te next formula
where w is the weigthed value for each asset, in this particular case we have:
so with this result we get 1.65
Explanation:
The retained earnings are calculated by adding net income to (or subtracting net losses from) the previous term's retained earnings and then subtracting any net dividend(s) paid to the shareholders. The figure is calculated at the end of each accounting period (quarterly/annually.)
Hope it helped u if yes mark me BRAINLIEST
Answer:
c) Provide potential benefits to both the issuer and the investor.
Explanation:
Convertible Bonds are Bonds that can be converted to Common Stocks at the the option of the investor or the issuer.
They represents the potential voting rights to the investor if they are converted to Common Stocks. This means the investor can take part in decision making of the company.
They also presents benefits to the issuer in that it reduces the financial risk of defaulting interest payments. This is good for the gearing ratio as well and can attract more investors.
Answer:
The answer would be neutrality of money theory
Explanation:
The neutrality of money theory claims that changes in the money supply affect the prices of goods, services, and wages but not overall economic productivity. Many of today's economists believe the theory is still applicable, at least over the long run.
