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Liula [17]
3 years ago
14

The risk-free rate, average returns, standard deviations, and betas for three funds and the S&P 500 are given below. Fund Av

g Std Dev Beta A 17.5 % 26.5 % 1.35 B 12.5 % 23.5 % 1.10 C 13.5 % 20.5 % 1.15 S&P 500 10 % 15 % 1 rf 4.0 % If these portfolios are subcomponents that make up part of a well-diversified portfolio, then portfolio ______ is preferred.
Business
1 answer:
Ainat [17]3 years ago
3 0

Answer:

Portfolio A is preferred.

Explanation:

Given the following sorted data from the question:

Fund        Avg         Std Dev         Beta

A                17.5%        26.5%         1.35

B                 12.5%       23.5%          1.10

C                 13.5%       20.5%          1.15

S&P 500     10%          15%               1

rf                  4.0%

To determine the preferred portfolio, the Treynor measure for each portfolio is estimated as follows:

Treynor measure = (Avg - rf rate) / beta

Therefore, we have:

Treynor measure of Portfolio A = (17.5% - 4.0%) / 1.35 = 10.00%

Treynor measure of Portfolio B = (12.5% - 4.0%) / 1.10 = 7.73%

Treynor measure of Porfolio C = (13.5% - 4.0%) / 1.15 = 8.26%

Since the 10% Treynor measure of Portfolio A is the highest, Portfolio A is preferred.

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True or false: Google manages every aspect of Google Cloud Platform customers' security.
Elis [28]

Answer:

False

Explanation:

Google Cloud Platform (GCP) only manages the lower levels of the security stack, for example, physical security. GCP gives their customers the tools they need to manage the security of their data's higher layers. E.g. customers may choose to use resources from several zones or regions in order to improve fault tolerance.

8 0
3 years ago
​refer to table 3-37. sarah and charles are both potters and each can switch between the production of vases and mugs at a const
bearhunter [10]
Sarah has an absolute advantage in the PRODUCTION OF MUGS. This is because Sarah can produce 32 mugs while Charles in comparison can only produce 25 mugs. 
Absolute advantage refers to the capacity of a country or a company or a person to execute a particular economic activity more efficiently than others. Someone who has an absolute advantage will be able to produce a particular good or service at a greater quantity than his competitors using the same resources. In the scenario given above, it can be seen that Sarah is able to produce more mugs efficiently more than Charles in six hours period.
3 0
3 years ago
An individual contributes $100 per month to a 401(k) retirement account. The account earns interest at a nominal annual interest
Art [367]

Answer:

$458,822

Explanation:

The formula to compute the future value is shown below:

Future value = Amount (1+i)^n -1 ÷ i)

where,

Interest rate = 8% ÷ 12 months = 0.6666%

And, the number of months = 35 years × 12 months = 420

Now put this value to the above formula

F = $100 × (1 + 0.6666%)^420 - 1 ÷ 0.6666%

After solving this,

the answer would be $458,822

8 0
3 years ago
Ted pays​ $2,100 interest on his automobile​ loan, $120 interest on a loan to purchase a computer for personal​ use, $630 intere
slamgirl [31]

Answer:

A. $850

Explanation:

The answer is net investment income of $850. This is because the investment interest expense to the extent of net investment income is deductible. The others listed are not deducted. The net investment income can either be capital gains, interest or dividends. When the expenses is less than net investment income, all investment interest expense is deductible and when interest expense is more than investment income, only expenses up to net investment income amount is deducted.

8 0
3 years ago
Read 2 more answers
What is the reason it's better to underestimate your income instead of overestimating when creating your budget?
Alik [6]

Answer:

  • <em>Underestimating your income is a conservative and healthy measure that can avoid financial problems.</em>

Explanation:

<em>Underestimating</em> your <em>income</em> is a conservative and healthy measure, such as it is overestimating your expenses.

Specially when your income is variable iit can be hard to predict. You will be safer both if your income lowers or your unpredictable expenses increase.

There are many unpredictable situations that could put you in a difficult situation: a disease, a natural disaster, the need to help a family member or friend in trouble. If any of these unfortunate circumstances arises and your budget is too tight, you could see yourself in financial trouble.

But, if you if all is smooth you will have in a happy situation, you will have a surplus which can use for savings, for an important purchase, or for vacations.

It is better to be cautious than to regret later!

6 0
3 years ago
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