Answer:
A). Lower
B). Lower
C). Higher
I think so not sure of my answer
Answer and Explanation:
The computation is shown below:
1. VaR = Expected return - z × Standard deviation
= 13% - 1.645 × 20%
= -19.90%
Therefore the option a is the correct answer.
2) Now the correlation coefficient is
Variance of the portfolio = (weight of A × Standard deviation 1)^2 + (weight of B × Standard deviation 2)^2 + (2 × weight of A × weight of B × Standard deviation 1 × Standard deviation 2 × correlation 1 and 2)
3.80% = (60% × 24%)^2 + (40% × 18%)^2 + (2 × 60% × 40% × 24% × 18% × correlation 1 and 2)
So the correlation is 0.583
Answer:
His firm's DPMO is 12,083
Explanation:
The computation of the DPMO is shown below:
= (Total complaints ÷ total number of defects opportunity) × 1 million
where,
Total complaints = Shrinkage complaints + poor quality complaints + wear off complaints + fitting issue complaints
= 22 + 16 + 12 + 8
= 58 customers defects
And, the total number of defects opportunity would be equal to
= Number of t-shirts sold × number of possible complaints
= 1,200 × 4
= 4,800
Now put these values to the above formula
So, the value would be equal to
= (58 ÷ 4,800) × 1,000,000
= 12,083
