Answer:
C) Invest $2500 in a risk free asset and $2500 in a stock with beta of 2.0
Explanation:
Stock that is beta 2 means that it is twice as volatile as the whole market. Meaning for example if the market is expected to move by 5% this stock will move 10%. New startup firms that are fast-growing usually have stocks in this category. It is more risky thank normal shares but no too much. We can invest $2,500 here.
We invest the remaining $2,500 in risk-free assets
This is a backup on the chance that the investment on beta 2 stocks do not perform, the risk-free assets will make up for losses.
Answer:
$3,860
Explanation:
<u>Value of stock at the end of Firm T:</u>
Firm T has stock of 20 tires at the end of the year
The cost price is $28 per tire
Value = Closing stock * Cost price of each tIres
Value = 20 * $28
Value = $560
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<u>Value of stock at the end of Firm B:</u>
Firm B has stock of 10 bicycles at the end of the year
The cost price is $330 each
Value = Closing stock * Cost price of each bicycle
Value = 10 * $330
Value = $3,300
Value of the inventory investment = Value of stock at the end of Firm T + Value of stock at the end of Firm B
Value of the inventory investment = $560 + $3,300
Value of the inventory investment = $3,860
The behavior of Albert is consistent with the law of demand.
The basic law of demand says that the higher the price of a commodity, the lower the quantity demanded; and the lower the price of a commodity, the higher the quantity demanded.
Albert went to his local store, hoping to buy a pair of Levi's for $30, however, when he got there, the price was lower at $18, he then decided to buy more than one because the price was lower. This is the law of demand taking place.
Answer:
The amount left for consumption spending is $32,932.95
Explanation:
The amount left for consumption spending is known as disposable income or take-home pay less savings .The disposable income is the income left after taxes have been paid to relevant tax authority.The computation of amount left for consumption is done below:
Gross income $40,221
Tax at 11%(11%*$40,221) ($4424.31
)
Disposable income $35,796.69
Savings at 8% of disposable income
($35,796.69*8%) ($2,863.74)
Amount left for consumption spending $32,932.95
This is not mean that I have to spend this $32,932.95 during the month, there might some investments I want to my money on to yield more returns.
Answer:
$1,389,375
Explanation:
Data provided as per the question:-
Product per unit = $195
Current sales = 42,300 units
Break-even sales = 35,175 units
The computation of margin of safety in dollars is shown below:-
Margin of safety (in units) = Total sales - Break-even sales
= 42,300 - 35,175
=7,125 units
Margin of safety (in dollars) = Margin of safety × Product per unit
=(7,125 × $195)
= $1,389,375
