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Sati [7]
3 years ago
12

Security A offers an expected return of 14%, with a standard deviation of 8%. Security B offers an expected return of 11%, with

a standard deviation of 6%. If you wish to construct a portfolio with a 12.8% expected return, what percentage of the portfolio will consist of security A?
Business
1 answer:
Phantasy [73]3 years ago
7 0

Answer:

60%

Explanation:

Since the question suggests a combined expected return portfolio of 12.8%, we ignore the standard deviation for both of the securities.

The percentage of the portfolio will consist of security A, Wa =

(Combined portfolio expected return - expected return of security B) / (expected return of security A - expected return of security B)

Wa = (0.128 - 0.11) / (0.14 - 0.11)

Wa = 0.018/0.03

Wa = 0.60 = 60%

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3 0
3 years ago
Haylock Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The direct labor budget indicates that 8,00
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Answer:

Check the explanation

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Fixed manufacturing overhead                                   100540

Total manufacturing overhead                                    111740

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3 0
4 years ago
If a firm increases its dividend payout rate the: firm will have less cash available for new investment. Unselected firm’s sto
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Answer:

1. If a firm increases its dividend payout rate the: firm will have less cash available for new investment. True

2. Stock price will likely fall by the same percentage. False

3. Retention ratio will rise at the same rate. False

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1. If a firm increases its dividend payout rate the: firm will have less cash available for new investment. This assertion is true because the company would be paying out a larger portion of earnings as dividends, hence the balance portion for new investment will be lower as a result.

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3 0
3 years ago
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