A monopolist maximizes profits by:
1 answer:
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Answer:
Portfolio SD = 0.18439 or 18.439%
Explanation:
The standard deviation of a stock or a portfolio is the measure of the total risk contained in the stock or portfolio. Risk can be defined as the volatility of the stock returns. To calculate the standard deviation of a two stock portfolio, we use the attached formula.
If the weight of stock x is 40%, the weight of stock y will be 1 - 40% = 60%
SD = √(0.4)^2 * (0.35)^2 + (0.6)^2 * (0.15)^2 + 2 * 0.4 * 0.6 * 0.25 * 0.35 * 0.15
SD = 0.18439 or 18.439%
Answer:
A lot of information is missing as well as the requirements, so I looked for similar questions.
The requirements are:
<em>a. What is the break-even point in sales dollars for RBC? </em>
<em>b. What is the margin of safety for RBC? </em>
<em>c. What sales dollars would be required to achieve an operating profit of $250.000? $490.000?</em>
<em />
a) break even point = total fixed costs / contribution margin
- total fixed costs = $1,125,430
- contribution margin = $1,427,642 / $1,953,000 = 73%
break even point = $1,124,430 / 73% = $1,540,315
b) margin of safety = current sales - break even point = $1,953,000 - $1,540,315 = $412,685
c) operating profit = $250,000 ⇒ ($1,125,430 + $250,000) / 73% = $1,884,150.69
operating profit = $490,000 ⇒ ($1,125,430 + $490,000) / 73% = $2,212,917.81
