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AnnZ [28]
3 years ago
9

If the economy is normal, Charleston Freight stock is expected to return 16.5 percent. If the economy falls into a recession, th

e stock's return is projected at a negative 11.6 percent. The probability of a normal economy is 80 percent while the probability of a recession is 20 percent. What is the variance of the returns on this stock?
A. 0.010346
B. 0.012634
C. 0.013420
D. 0.013927
E. 0.014315
Business
1 answer:
777dan777 [17]3 years ago
6 0

Answer:

option (B) 0.012634

Explanation:

Data provided in the question:

Expected return         Probability

         16.5%                     80%

        -11.6%                      20%

Now,

Mean return = ∑( Probability × Expected return )

= ( 0.8 × 16.5% ) + ( 0.2 × (-11.6%) )

= 13.2% - 2.32%

= 10.88%

Thus,

Variance = ∑(Probability × [ Expected return - Mean return ]² )

=  0.8 × ( 16.5% - 10.88% )² + 0.2 × ( -11.6% - 10.88% )²

= 0.8 × ( 5.62% )² + 0.2 × (-22.48%)²

= 0.8 × 0.0562² + 0.2 × 0.2248²

= 0.002526752 + 0.010107008

= 0.01263376 ≈ 0.012634

Hence,

The correct answer is option (B) 0.012634

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In the process of reconciling its bank statement for January, Maxi's Clothing's accountant compiles the following information:
Troyanec [42]

Answer:

$4,469

Explanation:

Calculation for what The adjusted cash balance per the books on January 31 is

Using this formula

Adjusted cash balance = cash balance per books -bank service charges - EFT automatically deducted - NSF Check

Let plug in the formula

Adjusted cash balance= $5325 - $31 -$500 -$325

Adjusted cash balance= $4,469

Therefore The adjusted cash balance per the books on January 31 is $4,469

5 0
3 years ago
Southern Hydraulic Supply is undertaking a review of their inventory policies. A typical product is a small hydraulic fitting. C
zheka24 [161]

Answer:

$418,550

Explanation:

Steps are shown below:

a. The computation of the economic order quantity is shown below:

= \sqrt{\frac{2\times \text{Annual demand}\times \text{Ordering cost}}{\text{Carrying cost}}}

= \sqrt{\frac{2\times \text{52,000}\times \text{\$50}}{\text{\$1.25}}}

= 2,040 units

b. The number of orders would be equal to

= Annual demand ÷ economic order quantity

= $52,000 ÷ 2,040 units

=  25.49 orders

c. The average inventory would equal to

= Economic order quantity ÷ 2

= 2040 units ÷ 2

= 1,020 units

d. The total cost of ordering cost and carrying cost equals to

Ordering cost = Number of orders × ordering cost per order

= 25.49 orders × $50

= $1,275

Carrying cost = average inventory × carrying cost per unit

= 1,020 units × $1.25

= $1,275

So, the total annual cost would be  

= Purchase cost + ordering cost + carrying cost

= $416,000 + $1,275 + $1,275

= $418,550

Purchase cost = Annual demand × cost per unit

                        = 52,000 × $8

                        = $416,000

6 0
3 years ago
Which of the following could describe a point that lies on an input contract curve? a. An allocation of good X and good Y betwee
kiruha [24]

Answer:

An allocation of labor (L) and capital (K) between two firms that makes the firms' isoquant curves tangent in an Edgeworth box  ( C )

Explanation:

A contract curve is a curve on which the various final allocations of two goods or service between two people are represented and this could be mutually beneficial as well. hence the best description of a point that lies on an input contract curve is An allocation of labor (L) and capital (K) between two firms that makes the firms' isoquant curves tangent in an Edgeworth box

3 0
3 years ago
Which of the following is a likely cause of​ globalization? A. Trade barriers have been added worldwide. B. Developing economies
Vesna [10]

Answer: Option B

Explanation: Globalization refers tot he process under which certain business entities starts operating their business in many different countries of the world.

One of the major reasons behind the increasing globalization is the condition in developing nations. The developing nations like India and Pakistan have a large population with a strong purchasing power, but due to lack of technology and capital these economies lack competitive producers.

Therefore, every second business firm with sufficient resources wants to operate in these economies for profit maximization.

4 0
3 years ago
jerome, incorporated, paid $8,850 to make a debt investment in trading securities of tedesco, incorporated. on december 30, (wit
Serjik [45]

The adjusting entry for the sale of debt securities by Jerome Incorporated on December 30, is as follows:

<h3>Adjusting Journal:</h3>

December 31:

Debit Cash $7,000

Credit Investment $6,500

Credit Gain on Sale of Investment $500

  • To record the sale of debt investment (part) and the gain therefrom.

<h3>What is an adjusting entry?</h3>

An adjusting entry is the journal entry made at the end of the financial year to ensure compliance with the accrual concept and the matching principle of generally accepted accounting principles.

An adjusting entry does not include the initial investment transaction made by Jerome Incorporated.

<h3>Transaction Analysis:</h3>

Dec. 30:

Cash $7,000  Investment $6,500 Gain on Sale of Investment $500

Learn more about adjusting entries at brainly.com/question/13933471

#SPJ1

4 0
1 year ago
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