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wlad13 [49]
3 years ago
14

You would like to combine a risky stock with a beta of 1.87 with U.S. Treasury bills in such a way that the risk level of the po

rtfolio is equivalent to the risk level of the overall market. What percentage of the portfolio should be invested in the risky stock
Business
1 answer:
Paul [167]3 years ago
8 0

Answer:

46.5%

Explanation:

The treasury bills have zero beta as they have no systematic risk. Beta is used in the Capital asset pricing Model to demonstrate a relationship between systematic risk and rate of return.

Expected Return = Rf + Beta * Rp

The percentage that should be invested in the risky portfolio will be,

1 - 1 / Beta

1 - 1 / 1.87

= 46.5%

You might be interested in
assume the fixed overhead per unit was $1.50 for both the beginning and ending inventory. what is net income under absorption co
Nesterboy [21]

Answer:

Net income under absorption costing is <u>$904,370</u>.

Explanation:

Note: This question is not complete and it contains an error in the only available data. The complete correct question is therefore provided before the question is answered as follows:

Kluber, Inc. had net income of $908,000 based on variable costing. Beginning and ending inventories were 55,800 units and 53,600 units, respectively. Assume the fixed overhead per unit was $1.65 for both the beginning and ending inventory. What is net income under absorption costing?

The explanation to the answer is now given as follows:

Variable costing is a costing technique that takes only the variable cost into consideration and exclude the fixed manufacturing overhead from the production production cost of a product.

Absorption costing is a costing technique in which the fixed overhead cost of production is allocated to products produced.

For this question, net income under absorption costing can be determined as follows:

Net income based on variable costing = $908,000

Total beginning fixed overhead = Beginning inventories * Fixed overhead per unit = 55,800 * $1.65 = $92,070

Total ending fixed overhead = Ending inventories * Fixed overhead per unit = 53,600 * $1.65 = $88,440

Adjustment for fixed overhead for the period = Total ending fixed overhead - Total beginning fixed overhead = $88,440 - $92,070 = -$3,630

Net income under absorption costing = Net income based on variable costing + Adjustment for fixed overhead for the period = $908,000 + (-$3,630) = $908,000 - $3,630 = $904,370

Therefore, net income under absorption costing is <u>$904,370</u>.

7 0
3 years ago
PLEASE HELP ME ASAP PLEASE!!!!
Grace [21]

Answer:

The answer is B

Explanation:

When nobody wants the product, the product builds up until there is so much the product becomes cheaper. This is because the product is not scarce anymore.

8 0
3 years ago
Read 2 more answers
Data related to the inventories of Costco Medical Supply are presented below: Surgical Surgical Rehab Rehab Equipment Supplies E
NemiM [27]

Answer:

$85

Explanation:

Costco Medical Supply's inventory:

                   Surgical Eq - Surgical Supp - Rehab Eq - Rehab Supp

Selling price     $260                  $100           $340               $165

Cost                  $170                     $90           $250              $162

Costs to sell     $30                      $15              $25                 $10

If we apply the net realizable value rule, the value of surgical supplies would be:

NRV = $100 = $15 = $85

the NRV is also the lower of cost since $85 < $90

6 0
3 years ago
EA4.
mart [117]

Answer:

$1,000

Explanation:

As we know that

Cost of material used = Beginning balance of inventory + purchase made during the month - ending balance of inventory

$900 = $200 + purchase made during the month - $300

$900 = -$100 + purchase made during the month

So, the purchase made during the month would be

= $900 + $100

= $1,000

We simply added the purchase to the beginning inventory and deduct the ending inventory

8 0
3 years ago
Write a paragraph (5-8 sentences) that compares and contrasts grants, scholarships, and loans. Be sure to include the pros and c
daser333 [38]

Answer:

he lets talk on here pls

Explanation:

8 0
2 years ago
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