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
9966 [12]
3 years ago
12

You decide to form a portfolio of the following amounts invested in the following stocks. What is the expected return of the por

tfolio?
Stock Amount Beta Expected Return

Apple $1,000 2.40 10.50%

Microsoft $7,000 0.73 16.90%

Ford $6,000 1.95 15.75%

Time Warner $6,000 1.27 11.80%
Business
1 answer:
cluponka [151]3 years ago
3 0

Answer: Expected return of the portfolio = 14,70%

Explanation: First we must add the amounts to calculate the total capital:

1000 + 7000 + 6000 + 6000 = $20000

The performance of a portfolio is given by the sum of each individual expected return weighted by its weight in capital.

Therefore we must calculate the weight (w) of each type of action:

W (apple) = 1000 / 20000 = 0,05

W (microsoft) = 7000 / 20000 = 0,35

W (ford) = 6000 / 20000 = 0,30

W (time warner) = 6000 / 20000 = 0,30

Expected return of the portfolio : (0,1050 . 0,05) + (0,1690 . 0,35) + (0,1575 . 0,30) + (0,1180 . 0,30) = 0,14705 = 14,70%

You might be interested in
If the marginal propensity to consume in a municipality is 0.8, what is the value of the simple multiplier? If a new stadium tha
Pachacha [2.7K]

Answer:

(a) 5

(b) $150 million

(c) 45 million

Explanation:

(a) Multiplier = 1 ÷ (1 - MPC )

                     = 1 ÷ (1 - 0.8 )

                     = 1 ÷ 0.2

                     = 5 ⇒ the value of the simple multiplier is 5.

b) If the autonomous expenditure is increased by $30 million then the total output will increase by:

= $30 million × 5

= $150 million

c) If the Marginal propensity to import is 0.3 then the import will increase by:

= 150 × 0.3

= 45 million

6 0
3 years ago
Stephanie receives high praise from her boss when she attracts a new client to her firm. this praise leads stephanie to work har
masya89 [10]
<span>D) Stephanie's Boss is exhibiting D) Positive Reinforcement as it her actions are being rewarded with praise, which in turn causes Stephanie to work harder to continue to grow the firm and receive more praise.</span>
4 0
3 years ago
Read 2 more answers
Which compounding periods will yield the lowest effective annual rate given a stated future value at year 5 and an annual percen
emmainna [20.7K]

Answer:

Annual

Explanation:

The ANNUAL compounding periods will yield the lowest effective annual rate given a stated future value at year 5 and an annual percentage rate of 10 percent

4 0
3 years ago
Which of the following statements is false? a. A credit is a deposit to a checking account. b. A debit is a withdrawal from a ch
allsm [11]

Answer:

c. An overdraft is a fee your bank charges you for opening a checking account.

Explanation:

Checking account is a deposit account with a bank or any  financial institution that allows the owner of such account to make withdrawals and deposits. They are also known as demand accounts or transactional accounts. They are very liquid and allows for countless deposits and withdrawals and can be obtained  by using automated teller machines, checks and electronic debits, and a number of  other methods.

A checking account is unlike other bank accounts like less liquid savings or investments account it allows for countless withdrawals and unlimited deposits, and savings accounts sometimes limit both.

The statement that an overdraft is a fee that banks charges for opening a checking account is false.

Overdraft is a form of extension of credit from a finiancial institution and often granted when an account reaches zero. it allow such account holder to continue withdrawing money even though the account has no funds  or insufficient funds that would cater  for and cover the amount of the withdrawal. So it is not the fee that bank charges for opening a checking account, instead what checking account offers is overdraft protection in which if a checking account owner write a check or make a purchase than the funds in the checking account, the bank may cover the difference.

8 0
3 years ago
Read 2 more answers
How cash inflow and outflow affects the components of a financial plan
Mrrafil [7]
Budgeting depends on cash inflow and​ outflow, and how much you have left affects investment​ decisions, retirement​ decisions, and financing decisions. ... All financial goals must be reasonable and achievable.
6 0
3 years ago
Other questions:
  • Navarro, Inc., issued $250,000 of eight percent, 20‑year bonds at 98 on June 30, 2012. Interest is payable semiannually on Decem
    6·1 answer
  • John Fare purchased $6,000 worth of equipment by making a $1000 down payment and promising to pay the remainder of the cost in s
    10·1 answer
  • The Stockholders' Equity section of the balance sheet of Sea Turtle Company reveals the following information: Common stock, $3
    11·1 answer
  • If commercial banks are maintaining a 4 percent reserve/deposit ratio and the fed raises the required reserve ratio to 6 percent
    9·1 answer
  • What is the annual percentage rate on a loan with a stated rate of 2.75 percent per quarter?A. 11.00 percentB. 11.09 percentC. 1
    9·1 answer
  • Which payment type is best if you are trying to stick to a budget?
    13·2 answers
  • An office manager is concerned with declining productivity. Despite the fact that she regularly monitors her clerical staff four
    6·1 answer
  • Samuel, Inc. has Accounts Receivable of $110,000 and an Allowance for Doubtful Accounts of $17,000. If it writes-off a customer
    10·1 answer
  • A private warehouse requires a high volume of warehouse throughput for efficient operation. which is the best reason for this?
    8·1 answer
  • Approximately what percentage of a reduction in errors did international air transport association have when thier employees wor
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!