If there were 70000 pounds of raw materials on hand on January 1, 100000 pounds are desired for inventory at January 31, and 250
1 answer:
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Answer:
Explanation:
a)We find the portfolio weights first. For a two security portfolio
x2 = 0.625 and x1 = 0.375
Then
rp = x1r1 + x2r2
rp = (0.375 ´ 0.06) + (0.625 ´ 0.14)
= 0.11
= 11.0%
Hence, he can improve the expected rate of return without any change in the risk of the portfolio.
b)
The expected return is:
rp = x1r1 + x2r2
rp = (0.5 *´ 0.09) + (0.5 ´* 0.14)
= 0.115 = 11.5%
sP2 = (0.5)^2(0.10)^2 + 2*(0.5)(0.5)(0.10)(0.16)(0.10) + (0.5)^2(0.16)^2
sP2 = 0.0097
sP = 0.985 = 9.85%
Hence, he can never perform better by investing equal amount in bond portfolio and index fund. The expected return increases to 11.5% and standard deviation decreases to 9.85%.
Answer:
The amount which investors have been prepared to pay $1123.153
Explanation:
It is given that government strip promised to pay $1000
So principal amount P = $1000
Time period id given n = 5 years
Rate of interest r = 2.35 %
We have to find the amount after 5 years
Future value is given as
, here P is principal amount, r is rate of interest and n is time period
So
So the amount which investors have been prepared to pay $1123.153