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Alona [7]
3 years ago
7

You hold a diversified $100,000 portfolio consisting of 20 stocks with $5,000 invested in each. The portfolio's beta is 1.12. Yo

u plan to sell a stock with b = 0.90 and use the proceeds to buy a new stock with b = 1.50. What will the portfolio's new beta be? Do not round your intermediate calculations.
Business
1 answer:
Readme [11.4K]3 years ago
7 0

Answer:

1.15

Explanation:

A diversified portfolio consists of $100,000 with 20 stocks and $5,000 invested in each of the stock

The portfolio beta is 1.12

You plan to sell a stock with a beta of 0.90, the proceeds gotten from it will be used to purchase a new stock with a beta of 1.50

Therefore, the portfolio's new beta can be calculated as follows

= (20×1.12-0.9+1.50)/20

= (22.4-0.9+1.50)/20

= 23/20

= 1.15

Hence the portfolio's new beta is 1.15

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fredd [130]

Answer:

a. 2.23

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Explanation:

a. Answer to Part A

Payback Period = Investment / Annual Cash Inflow

= 250000 / 112115

= 2.23

Answer to Part B

Payback Period = Investment / Annual Cash Inflow

= 200000 / 62375

= 3.21

Working Note

<em>Particulars                Case A     Case B </em>

After Tax Income  72115         39000

Add: Depreciation  40000       23375

Cash Inflow             11,2115         62375

<em>Particulars              Case A           Case B </em>

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Life of the Asset           6                  8

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8 0
3 years ago
Write a paragraph in no more then 100 words. Do you think it's right to let animals work for human ?​
valina [46]

Answer:

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Explanation:

it has become a debatable topic about the exploitation of animals by mankind. Some people believed that animals should not be exploited and should be treated fairly by human beings. In contrast, others think animals should be utilised to assist humans in various kinds of ways, such as the source of food or for medical testing. The following essay will discuss both views in details, but in my opinion, I believe that animals can be used as the source of food or to assist human beings in the proportionate way and human should treat them properly.

8 0
3 years ago
Read 2 more answers
The admissions director at big city university proposed using the iq scores of current students as a marketing tool. the univers
Vika [28.1K]

The complete question is as follows:

The admission directory of Big City University has a novel idea. He proposed using the IQ scores of current students as a marketing tool. The university agrees to provide him with enough money to administer IQ tests to 50 students. So the director gives the IQ test to an SRS of 50 of the university’s 5000 freshman. The mean IQ score for the sample is xbar=112. The IQ test he administered is known to have a σ of 15. What is the 95% Confidence Interval about the mean? What can the director say about the mean score of the population of all 5000 freshman?

Answer: The 95% confidence interval about the mean is Confidence interval = 107.84 \leq \mu \leq 116.16.

The director can say that he is 95% confident that the mean IQ score of the 5000 freshmen lies between 107.84 and 116.16.

We follow these steps to arrive at the answer:

Since the population standard deviation of the IQ test is known, we can use the Z scores to find the confidence interval.

The formula for the confidence interval about the mean is:

Confidence interval = \overline{X}\pm Z*\frac{\sigma}{\sqrt{n}}

In the equation above, X bar is known as the point estimate and the second term is known as Margin of Error.

The Critical Value of Z at the 95% confidence level is 1.96.

Substituting the values in the question in the equation above we have,

Confidence interval = \112\pm 1.96*\frac{15}{\sqrt{50}}

Confidence interval = \112\pm 4.157787873}

Confidence interval = 107.8422121 \leq \mu \leq 116.1577879

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