Answer:buying and selling decisions are consistent
Explanation:
Answer: b. Cash Cow
In the Boston Consulting Group’s market growth/market share matrix, a business is classified as a cash cow if it holds the leading market share in its market, but the market does not provide much opportunities for growth.
Since Tide holds a predominant share in the detergent market in United States and since the detergent market is saturated, we can classify Tide as a cash cow.
The cash generated from cash cows are generally used to fund other projects and research and development.
Answer:
phase estimating method
Explanation:
The approach to estimating project time and cost that begins with an overall estimate for the project and then refines estimates for various stages of the project as it is implemented is known as PHASE ESTIMATING METHOD
The above statement is based on the fact that PHASE ESTIMATING METHOD is applicable whereby the total estimate of a product life cycle is extremely difficult to ascertain.
Instead, to get the estimate, each elemental stage is estimated one after the other, with the immediate stage having an elaborate estimate, while the subsequent stages having a brief or overview estimate.
Answer:
Portfolio Return = 11.975%
Explanation:
The portfolio return is calculated by taking the weights of individual securities in a portfolio and multiplying them by the return of individual securities. The formula can be written as,
Portfolio return = wA * rA + wB * rB
Where,
- wA is the weight of security A
- rA is the return on security A
- wB is the weight of security B
- rB is the return on security B
The risk free asset has a beta of zero.
Let the weight of risk free asset be x. The weight of risky asset is 1-x.
Portfolio beta = 0.975 = x * 0 + (1-x) * 1.3
0.975 = 1.3 - 1.3x
0.975 - 1.3 = -1.3x
-0.325 / -1.3 = x
x = 0.25
Portfolio return = 0.25 * 0.032 + (1-0.25) * 0.149 = 0.11975 or 11.975%
Answer and Explanation:
a. Here it is reasonable to presume that the treasury bond generates high returns when there is a recession.
b. The calculation of the expected rate of return and the standard deviation for each investment is shown below:
For stocks
= (Expected return of the boom × weightage of boom) + (expected return of the normal economy × weightage of normal economy) + (expected return of the recession × weightage of recession)
= (29% × 0.30) + (18% × 0.50) + (-4% × 0.20)
= 8.7% + 9% - 0.80%
= 16.9%
For bonds
= (Expected return of the boom × weightage of boom) + (expected return of the normal economy × weightage of normal economy) + (expected return of the recession × weightage of recession)
= (6% × 0.30) + (9% × 0.50) + (16% × 0.20)
= 1.8% + 4.5% + 3.2%
= 9.5%
Now the standard deviation calculation is to be shown in the excel spreadsheet
For the stock it is 11.48%
And, for the bond it is 3.5%
c. The investment that should be prefer could be computed by determine the coefficient of variation which is shown below:
Formula i.e. used is
= Standard deviation ÷ expected return
For stock, it is
= 16.9% ÷ 11.48%
= 1.47
And, for bonds it is
= 9.5% ÷ 3.5%
= 2.71
Since for the bonds the coefficient of variation is greater so the same is to be considered
Therefore the bond should be prefer
