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Alinara [238K]
3 years ago
10

You invest 70% of your money on a stock with expected return of 15% and standard deviation of 22%. The rest of your money is inv

ested in T-bills with expected return of 7%. The expected return and standard deviation of your complete portfolio are a. 12.6% and 15.4%. b. 15% and 22%. c. 7% and 0%. d. 11% and 11%. e. None of the above option is correct.
Business
1 answer:
Ahat [919]3 years ago
4 0

Answer:

The portfolio return is 12.6% and the portfolio SD is 15.4%. Thus, option a is the correct answer.

Explanation:

The expected return of a portfolio is the weighted average of the individual stock returns that form up the portfolio. Thus, the expected return for a two stock portfolio is,

Return of Portfolio =  wA * rA  +  wB * rB

Where,

  • w represents the weight of each stock in the portfolio
  • r represents the return of each stock

Portfolio return = 0.7 * 0.15  +  0.3 * 0.07  =  0.126  or 12.6%

The standard deviation of a two stock portfolio containing one risky and one risk free asset is the weight of risky asset in the portfolio multiplied by the standard deviation of the risky asset. The risk free asset has zero standard deviation.

Standard deviation of such a portfolio is,

Portfolio SD = w of risky asset * SD of risky asset

Portfolio SD = 0.7 * 0.22  

Portfolio SD = 0.154 or 15.4%

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Answer:

The amount of stockholders' equity as of July 1 of the current year is $39,994

Explanation:

In John Wong, DVM, on July 1 of the current year:

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Basing on accounting equation:

Total asset = Liabilities + Stockholders' Equity

Stockholders' Equity  = Total asset - Liabilities = $45,704 - $5,710 = $39,994

7 0
2 years ago
Custom Homebuilders (CH) designs and constructs high-end homes on large lots owned by customers. CH has developed several formul
Alexandra [31]

Answer:

$981,000 - Total Building Cost

Explanation:

To answer this question, we were told that the customer wants to build a moderate 3,800 square foot home. However, although it says with no utilities, utility cost will be applicable because it represents what is needed by the builders and engineers to get their work done on the vacant lot of land.

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= $981,000

6 0
3 years ago
Would you recommend that Apple raise or lower its price for the iWatch to increase​ revenue?
melisa1 [442]

I would recommend it lower its price.

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iWatch is not a product a lot of people wish for and it doesn't compliment the life of users enough to be expensive to buy. When it is expensive sales will reduce which would make sales revenue reduce but if the price is low a lot of people will patronize the product thus increase revenue.

#learnwithbrainly

6 0
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Davidson Software Technologies believes in hiring only the best programmers in the industry. As a result, it uses a comprehensiv
Vladimir [108]

Answer:

The correct answer is C

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HRM system is the system which is designed in order to automate the business process of human resource, compliance, transactions and payroll. This system allows the business to focus on the people through streamlining all the software workforce into the business intelligence solution.

Recruitment and selection is the procedure of identifying the requirement of job and defining the need of the position, advertising the position and selecting the appropriate person for the position.

Therefore, the recruitment and selection is the component of HRM system which uses the hiring procedure that comprise of testing and interviewing the professionals.

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2 years ago
You believe that the Non-Stick Gum Factory will pay a dividend of $2 on its common stock next year. Thereafter, you expect divid
Ivan

Answer:

$28.57

Explanation:

Dividend growth model can only be used in a situation where the firm pays a dividend which can tend to grow at constant rates reason been that the stock has been influenced by the growth rates which is involved in the dividends which means the firm can increase the dividends.

Therefore the Dividend that is to be paid next year will be:

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=$28.57

Therefore the amount I should be prepared to pay for the stock today will be $28.57

4 0
2 years ago
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