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pav-90 [236]
3 years ago
6

Consider two perfectly negatively correlated risky securities, A and B. Security A has an expected rate of return of 16% and a s

tandard deviation of return of 20%. B has an expected rate of return of 10% and a standard deviation of return of 30%. The weight of security B in the minimum-variance portfolio is?
Business
1 answer:
alex41 [277]3 years ago
8 0

Answer:

40%

Explanation:

Here, We have two perfectly negatively correlated risky securities.

So, the minimum variance portfolio will be the portfolio with zero variance.

so, x(A)=σ(B)/(σA)+σ(B)) and x(B)=σ(A)/(σ(A)+σ(B))

therefore, x(B)=20/(20+30)

x(B)=20/50

x(B)=2/5 = 40%

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For journal entries 1 through 12, select the letter of the explanation that most closely describes it in the space beside each e
Ksivusya [100]

Question Completion:

For each of the following entries, select the letter of the explanation that most closely describes it in the space beside each entry. (You can use letters more than once.)

A. To record receipt of unearned revenue

B. To record this period's earning of prior unearned revenue

C. To record payment of an accrued expense

D. To record receipt of an accrued revenue

E. To record an accrued expense

F. To record an accrued revenue

G. To record this period's use of a prepaid expense

H. To record payment of a prepaid expense

I To record this period's depreciation expense

Journal Entries

Insurance Expense 1,900

Prepaid Insurance 1,900

Salaries Payable 3,900

Cash 3,900

Prepaid Rent 3,200

Cash 3,200

Salaries Expense 4,900

Salaries Payable 4,900

Interest Receivable 1,900

Interest Revenue 1,900

Cash 3,900

Accounts Receivable (from consulting) 3,900

Cash 5,900

Unearned Professional Fees 5,900

Cash 4,300

Interest Receivable 4,300

Rent Expense 8,000

Prepaid Rent 8,000

Interest Expense 6,300

Interest Payable 6,300

Depreciation Expense 1,300

Accumulated Depreciation 1,300

Unearned Professional Fees 1,900

Professional Fees Earned 1,900

Answer:

Journal Entries with appropriate descriptions:

Insurance Expense 1,900

Prepaid Insurance 1,900

G. To record this period's use of a prepaid expense

Salaries Payable 3,900

Cash 3,900

C. To record payment of an accrued expense

Prepaid Rent 3,200

Cash 3,200

H. To record payment of a prepaid expense

Salaries Expense 4,900

Salaries Payable 4,900

E. To record an accrued expense

Interest Receivable 1,900

Interest Revenue 1,900

F. To record an accrued revenue

Cash 3,900

Accounts Receivable (from consulting) 3,900

D. To record receipt of an accrued revenue

Cash 5,900

Unearned Professional Fees 5,900

A. To record receipt of unearned revenue

Cash 4,300

Interest Receivable 4,300

D. To record receipt of an accrued revenue

Rent Expense 8,000

Prepaid Rent 8,000

G. To record this period's use of a prepaid expense

Interest Expense 6,300

Interest Payable 6,300

E. To record an accrued expense

Depreciation Expense 1,300

Accumulated Depreciation 1,300

I To record this period's depreciation expense

Unearned Professional Fees 1,900

Professional Fees Earned 1,900

B. To record this period's earning of prior unearned revenue

Explanation:

Journal entries are usually recorded to adjust revenue and expenses to the accrual basis of accounting and to match expenses to the period's revenue and vice versa.  Short narrations are provided after recording each transaction.  The purpose is to provide some descriptions of the transaction so that it can be understood by another person reviewing the records.

4 0
3 years ago
Saturn Systems Inc., which is headquartered in the United States, has its production plant located in a less-developed country w
ivann1987 [24]

Answer:

a. unethical

Explanation:

This company's behavior is unethical. In the globalized world, it is natural for transnational firms to direct their production structure to countries where labor is cheaper, as this makes their product more competitive in the international market. However, these firms must not take advantage of regulatory failures in the labor market in these countries to increase their profit. Every firm must be concerned and ensure that the physical integrity and health of employees who work on its plants is preserved, regardless of location. Thus, in order to act ethically, this firm should implement process improvements to minimize the exposure of employees to chemical agents and to inhibit the exploitation of the labor that occurs when employees work in excess and without being paid for overtime.

3 0
3 years ago
On May 7, Bergan Company purchased on account 10,000 units of raw materials at $8 per unit. During May, raw materials were requi
katrin [286]

Answer:

Dr Purchases/ Raw Material Inventory .......................80,000

Cr   Bank/Account Payable....................................................80,000

Dr Work in Process ................................................................67,400

Cr Raw Material Inventory............................................................67,400

Explanation:

FOR PURCHASE OF MATERIAL

Dr Purchases/ Raw Material Inventory .......................80,000

Cr   Bank/Account Payable....................................................80,000

Being purchase of 10,000 units of raw materials at  $8 per unit

FOR MATERIAL FOR PRODUCTION

Dr Work in Process ................................................................67,400

Cr Raw Material Inventory............................................................67,400

Being materials used in production: 7,500 units at $8 per unit for job 200 and 1,480 units at $5 per unit for job 305

In relation to 'purchase of material' we debit the raw material inventory account because material is increasing and is an asset account; and we credit Bank if the materials have been paid for OR 'accounts payable', if the material has not yet been paid for.

In relation to 'requisition of material for production' we debit the raw material inventory account because material is decreasing and is an asset account; and we credit 'work in process' to assign the cost of materials to the ongoing jobs respectively.

5 0
3 years ago
Assume you have $2,000 in a savings account at the beginning of the year and the price level is equal to 100. If the price level
leva [86]

Answer:

$1,667

Explanation:

Given that,

Savings account at the beginning of the year = $2,000

Price level at the beginning of the year = 100

Price level at the end of the year = 120

Price level increases from 100 to 120

Therefore, what was worth $120 earlier, is not worth only $100.

Hence, $120 at the beginning of the year is worth = $100 at the end of the year

$1 at the beginning of the year is worth = ($100 ÷ $120) at the end of the year

Savings of $2,000 at the beginning of the year is worth:

= ($100 ÷ $120) × $2,000

= 0.833 × $2,000

= $1,667

Therefore, the real value of the savings is $1,667.

5 0
3 years ago
January 1, 2021, Woody Forrest Corporation granted executive stock options to purchase 30,000 of its common shares at $7 each. T
Anton [14]

Answer:

169,000

Explanation:

Calculation to determine what The number of shares to be used in computing diluted earnings per share for the quarter is:

First step is to calculate the amount assumed to be exercised

Exercised amount= 30,000*$7 / $15avg

Exercised amount= 14,000

Second step is to calculate the Net

Net=30,000-14,000

Net= 16,000

Now let calculate The number of shares to be used in computing diluted earnings per share

Using this formula

Number of shares=Outstanding+Net

Let plug in the formula

Number of shares=153,000 +16,000

Number of shares= 169,000

*diluted eps=$28,000 /169,000

Therefore The number of shares to be used in computing diluted earnings per share for the quarter is: 169,000

8 0
2 years ago
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