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Rainbow [258]
3 years ago
6

g of 1.17 and an expected return of 15.4 percent. A risk-free asset currently earns 4.7 percent. The beta of a portfolio compris

ed of these two assets is .76. What percentage of the portfolio is invested in the stock
Business
1 answer:
alexira [117]3 years ago
3 0

Answer:

65% of the portfolio is invested in stock.

Explanation:

The weight of stock is assumed to be x.  

Then, the Weight of Risk-Free Stock will be 1 - x.

Beta\ of\ Portfolio\ =\ Weight\ of\ Stock\ \times\ Beta\ of\ Stock\ +\ Weight\ of\ Risk\ free\ asset\ \times\ Beta\ of\ Risk\ Free\ Asset

Beta of Portfolio =x\ \times\ 1.17\ +\ [\ ( 1\ -\ x)\ \times\ 0]

0.76 = 1.17 x

x = 0.76 / 1.17

x =0.64957

x = 64.957%

So, 65% of the portfolio is invested in stock.  

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In a 1953 speech, President Dwight Eisenhower listed some things that cost about as much as "one modern heavy-duty bomber": a mo
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Answer: In Dwight Eisenhower's speech the key points he was trying to make were <em>using scarce resources involves trade offs </em>and the <em>United States government only had so much money.</em>

The correct answers are A and B.

Explanation:

The speech that was given by Eisenhower in 1953 was called "The Change of Peace." He states in this speech that if there is a danger that exists anywhere in the world, then it is shared by all the people. He goes on state that hope should be equally shared by all the people. He then speaks about atomic warfare and atomic bombs and how the U.S and Russia knows the secrets to atomic bombs.

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3 years ago
50 red and 50 black balls in a box when you randomly pick two balls without replacement
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2/100
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7 0
3 years ago
Factors affecting communication in a an organization
iVinArrow [24]

FACTORS AFFECTING COMMUNICATION

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3 0
3 years ago
Ambrin Corp. expects to receive $2,000 per year for 10 years and $3,500 per year for the next 10 years. What is the present valu
sineoko [7]

Answer:

A. $19,034

Explanation:

The computation of the present value for 20 years cash flow is shown below:

For the First 10 years

Given that

Payment for first 10 years = $2,000

Discount rate = 11%

Now the present value is

= $2000 ÷ 1.11 + $2,000 ÷ 1.11^2 +...........+ $2,000 ÷1.11^10

= 11,778.46402 ..............(1)

For the Next 10 years

Given that

Payment for next 10 years = 3,500

Discount rate = 11%

Now the present value is

= $3,500 ÷ 1.11 + $3,500 ÷ 1.11^2 +...........+ $3,500 ÷ 1.11^10

= 20,612.312

So, today present value is

= $20,612.312 ÷ 1.1110

= 7,259.339 ...........................(2)

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Total present value is

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3 0
3 years ago
A company has two divisions and evaluates management using return on investment. Division 1 currently makes a part that it sells
Anton [14]

Answer:

c. Division 1 should continue to do business with Division 2 because Division 1's variable cost per part is only $18.

Explanation:

Since the variable cost per part is only $18 and Division 1  sells to Division 2 at $25, it is in the company's overall interest that business should continue between the two divisions.

The cost of getting the part from outside is $26.  This will incur more cost to the company and create excess capacity for Division 1.

Fixed costs are not relevant in making a decision of this nature.  The costs would be incurred irrespective of the decision made.  They are therefore irrelevant.  The relevant cost is the variable cost of $18 per unit.  It should be the focus of the decision, including the possibility of excess capacity for Division 1.

7 0
3 years ago
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