Answer:
<u>Risk premiums </u>= Alpha A x Risk Premium
S&P Portfolio Risk premiums = 3 x 5% = 15%
Hedge Fund Portfolio Risk premiums = 3 x 10% = 30%
<u>SDs</u> = Sd x √(A)
S&P Portfolio = 20% x √(3) = 34.64%
Hedge Fund Portfolio = 35% x √(3) = 60.62%
<u>Sharpe ratios </u>= Risk premium / SDs
S&P Portfolio = 15% / 34.64% = 0.43
Hedge Fund = 30% / 60.62% = 0.49
<u>If the exchange rate between the U.S. dollar and </u><u>Japanese </u><u>yen changes from</u><u> $1 = 100 yen</u><u> to </u><u>$1 = 90 yen,</u><u> then: Japanese tourists to the U.S. will benefit.</u>
What happens in the foreign exchange market when a surplus of dollars exists?
- The supply and demand of each currency must be equal in order for the foreign exchange market to be in equilibrium, as it is in every market.
- Until equilibrium is reached, the exchange rate will change according to whether there is a surplus or shortage on the market.
What connection exists between the supply of foreign currency and the exchange rate?
- This decreases demand for exports and reduces the amount of foreign currency available, much like how domestic goods become more expensive for foreign consumers when the foreign exchange rate declines.
- As a result, there is a direct connection between the supply of foreign currency and the foreign exchange rate.
Learn more about foreign exchange
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Answer:A safe deposit box, also known as a safety deposit box, is an individually secured container, usually held within a larger safe or bank vault. Safe deposit boxes are generally located in banks, post offices or other institutions. ... In the United States, neither banks nor the FDIC insure the contents.
Explanation: