1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
diamong [38]
3 years ago
12

Ivan Knobel holds a well-diversified portfolio that has an expected return of 11.0% and a beta of 1.20. He is in the process of

buying 1,000 shares of Syngine Corp at $10 a share and adding it to his portfolio. Syngine has an expected return of 13.0% and a beta of 1.50. The total value of Ivan's current portfolio is $90,000. What will the expected return and beta on the portfolio be after the purchase of the Syngine stock?
Business
1 answer:
-Dominant- [34]3 years ago
8 0

Answer:

Exptected return = 11.2%

Beta = 1.23  

Explanation:

The post-purchase expected return of the portfolio is the weighted average return of Syngine stock and pre-purchase return of the portfolio, calculated as below:

Post-purchase portfolio return = (Market value of Synhine stock purchase/Total market value of post-purchase portfolio)x Syngine stock return + (Market value of pre-purchase porfolio/Total market value of post-purchase portfolio) x Pre-purchase return

= [(1,000 x 10)/(1,000 x 10 + 90,000)] x 13% +  [(90,000)/(1,000 x 10 + 90,000)] x 11% = 11.2%

Using the same concept, beta of the post-purchase is calculated as below:

Post-purchase portfolio beta = [(1,000 x 10)/(1,000 x 10 + 90,000)] x 1.5 +  [(90,000)/(1,000 x 10 + 90,000)] x 1.2 = 1.23

You might be interested in
The following inventory valuation errors have been discovered for Knox Corporation:
Whitepunk [10]

Answer:

Income +/- inventory adjustment

2015:   138,000 - 23,000 = 115,000

2016:  254,000 + 61,000 = 315,000

2017:   168,000 + 17,000 = 185,000

Explanation:

<u>Inventory Identity:</u>

Beginning + Purchases = Ending + COGS

As the mistake is on the right side it compensates by the other component which is COGS

<u><em>When the inventory is overstated</em></u> this means COGS is understated.

We didn't record the cost of good sold thefore our gross profit is higher making the net income higher.

<u><em>When the inventory is understated</em></u> this means COGS is overstated.

We record more cost of goods sold thefore our gross profit is lower making the net income fewer as well.

7 0
3 years ago
Which of the following statements is true?
nadezda [96]

Answer:

Correct option is (c)

Explanation:

MIS is the abbreviation for management information system. It helps managers organizing different tasks and departments within the organization.

It is a computer based software that enables retrieving past data, analyse present data and predict future data, thereby simplifying decision making process. As such, it can be said that MIS contributes or enables business success and innovation.

3 0
3 years ago
While sitting beside a swimming pool, your neighbor Bob, a roof installer, tells you that you should buy stock in HotNet because
Nesterboy [21]

Answer: d) Cannot sue Bob for misrepresentation

Explanation: A misrepresentation is a false statement made from one person to another that a certain fact is true or accurate when it is indeed false. The fact that the value of the stock I bought on Bob's opinion does not give me the right to sue him for misrepresentation (intentional). The reason is this, Bob's expression of his opinion concerning the HotNet stock does not usually constitute a misrepresentation even when it turns out that his opinion is incorrect. It wasn't intended, however, he could be sued for negligent misrepresentation.

8 0
3 years ago
A portfolio with a 30% standard deviation generated a return of 15% last year when T-bills were paying 6.0%. This portfolio had
jarptica [38.1K]

Answer: 0.3

Explanation:

The Sharpe ratio is simply used by organizations and investors in order to compare the return on an investment to its risk.

From the question, we are informed that a portfolio has a 30% standard deviation generated a return of 15% last year when T-bills were paying 6.0%.

The Sharpe ratio will be:

= (15% - 6.0%)/30%

= 9%/30%

= 0.09/0.3

= 0.3

4 0
3 years ago
By paraphrasing, an individual is:
natita [175]
By paraphrasing, an individual is:
ANSWER C. Putting another person's idea into different words or context
6 0
3 years ago
Read 2 more answers
Other questions:
  • A domestic manufacturer of watches purchases quartz crystals from a Swiss firm. The crystals are shipped in lots of . The accept
    13·1 answer
  • Which type of account typically has low liquidity?
    13·1 answer
  • Steven is moving into his first apartment in a few weeks and has been busy packing. In addition to the things he has purchased w
    10·1 answer
  • Publix, a southeastern grocery store chain, has signs saying that tips are not accepted and employees are all informed of this p
    11·1 answer
  • In each of the following cases, calculate the accounting break-even and the cash break-even points. Ignore any tax effects in ca
    5·1 answer
  • The term "financial distress costs" includes which of the following? I. Direct bankruptcy costs II. Indirect bankruptcy costs II
    9·1 answer
  • A baseball team plays in a stadium that holds 58,000 spectators. With ticket prices at $10, the average attendance had been 27,0
    12·2 answers
  • What is not one of the five main catogories of risk faced by individuals?
    11·1 answer
  • DeBeers is an example of a government monopoly. True or False?
    14·1 answer
  • What is meant by 'Price elastic demand?​
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!