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PilotLPTM [1.2K]
4 years ago
14

Consider an equally weighted portfolio that contains five stocks. If the average volatility of these stocks is 40% and the avera

ge correlation between the stocks is .5, then the volatility of this equally weighted portfolio is closest to:
Business
1 answer:
MAVERICK [17]4 years ago
6 0

Answer:

The volatility of this equally weighted portfolio is closest to 0.31

Explanation:

Individual Stock + ( 1 - 1/n) * Average Covariance between the stocks

Var = ( 1 / 5) (0.40)2 + ( 1 - 1/5) (0.5( (0.4) (0.4)

Var = 0.096

standard deviation = Square root of variance

= Square root of 0.096

= 0.31

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FV of $600 each 6 months for 5 years at a nominal rate of 12%, compounded semiannually. Do not round intermediate calculations.
Lerok [7]

Answer:

Amount after 5 year will be $1074.5

Explanation:

We have given principal amount P = $600

Time t = 5 year

Rate of interest r = 12%

It is given that amount is compounded semiannually

So time period = 5×2 = 10 period

And rate of interest semiannually will be =\frac{12}{2}=6 %

We have to find future value after 5 year

Future value is given by A=P(1+\frac{r}{100})^n

So A=600\times (1+\frac{6}{100})^{10}

=600\times1.06^{10}

=600\times1.79=1074.5

So amount after 5 year will be $1074.5

8 0
3 years ago
A paint manufacturer has a uniform annual demand for 16,000 cans of automobile primer. It costs $4 to store one can of paint for
Luda [366]

Answer:

B) The company should have 8 production runs each year

Explanation:

Given :

Uniform annual demand, = 16000

Total cost, C = 500y + 2x

xy = 16000

x = \frac{16000}{y}

Let's substitute \frac{16000}{y} for x in C.

Therefore, we have :

C = 500y + 2( \frac{16000}{y} )

C = 500y + \frac{32000}{y}

In order to minimize the total storage and setup costs,

Differentiating wrt y:

C = C_m_i_n,    \frac{dc}{dy}=0

C'(y) = 500y + \frac{32000}{y^2} = 0

y^2 = \frac{320}{5} = 64

y = \sqrt{64} = 8

In order to minimize the total storage and setup costs, the company should have 8 production runs each year

6 0
3 years ago
A step taken so that a reasonable person could assume that a business took appropriate safety measures is called ___________
Wittaler [7]

Answer: Risk assessment

Explanation: This is known as risk assessment, the overall process of identifying all the risks to and from any activity and assessing the potential impact of each risk.  This is achieved by assessing the likelihood that each risk will occur, and then combining the result according to an agreed rule to give a single measure of potential impact.

To have a thought about what aspect of a business, might cause harm and decide whether you are taking reasonable steps to prevent that harm is known as a risk assessment.

7 0
3 years ago
Which of the following companies has the lowest degree of leverage?
LiRa [457]

The firm with a 20% Debt and 80% Equity has the lowest degree of leverage.

<h3>What is a degree of leverage?</h3>

This means  how much a firm operating income changes in response to a change in sales.

Because the Firm C has a low debt, this means its has the lowest degree of leverage when compared to others.

Therefore, the Option C is correct.

Missing options "90% Debt, 10% Equity

30% Debt, 70% Equity

20% Debt, 80% Equity

50% Debt, 50% Equity"

Read more about degree of leverage

<em>brainly.in/question/8720374</em>

#SPJ1

4 0
3 years ago
If a monopolist or a perfectly competitive firm is producing at a break-even point, then:
Klio2033 [76]
If a monopolist or a perfectly competitive firm is producing at break-even point then they're basically equaling their average revenue to the average total cost - ii.

This basically means that they are operating at a level where the amount which they produce relates to the amount they spend. 
4 0
4 years ago
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