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Umnica [9.8K]
3 years ago
12

Portfolio AB has half of its funds invested in Stock A and half in Stock B. Portfolio ABC has one third of its funds invested in

each of the three stocks. The risk-free rate is 5%, and the market is in equilibrium, so required returns equal expected returns. Which of the following statements is CORRECT?
a) Portfolio ABC's expected return is 10.66667%.
b) Portfolio AB has a standard deviation of 20%.
c) Portfolio ABC has a standard deviation of 20%.
d) Portfolio AB's required return is greater than the required return on Stock A.
e) Portfolio AB's coefficient of variation is greater than 2.0.
Business
1 answer:
Anit [1.1K]3 years ago
5 0

Answer:

a) Portfolio ABC's expected return is 10.66667%.

Explanation:

Some information is missing:

Stock                Expected         Standard             Beta

                         return              deviation

A                            10%                 20%                 1.0

B                            10%                  10%                 1.0

C                            12%                  12%                 1.4

The expected return or portfolio AB = (1/2 x 10%) + (1/2 x 10%) = 10% (it is the same as the required rate for stock A or B)

The expected return or portfolio ABC = (weight of stock A x expected return of stock A) +  (weight of stock B x expected return of stock B) + (weight of stock C x expected return of stock C) = (1/3 x 10%) + (1/3 x 10%) + (1/3 x 12%) = 3.333% + 3.333% + 4% = 10.667% <u>THIS IS CORRECT</u>

Options B, C, D and E are wrong.

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Jeff and Ryan rent a house from Mike and Yolanda Reynolds. They are three months behind in their rent and neighbors have been co
Nady [450]

Answer:

C) Yes, Yolanda is correct. It is illegal for Mike to take such actions. The landlords may serve the tenants with a three-day notice of eviction.

Explanation:

Eviction processes can be relatively simple, by just sending an eviction notice and the tenants voluntarily leaving the property, or they can be very messy and end up in court. But in no case, can the landlord just get into the property and kick the tenants out.

The length of the eviction process also varies depending on the cause, in this case since the tenants already we more than 3 months of rent tht is more than sufficient cause.

If after the 3 day notice Jeff and Ryan still haven't left, then Yolanda and Mike will have to start an eviction lawsuit that usually takes a few weeks (its a speedy process). Since Yolanda and Mike have a reasonable cause for evicting the tenants, the court will probably order and immediate eviction (or maybe give them a week or so).

Then if Jeff and Mike still stay on the property things get messy and the police should force them out.  

5 0
3 years ago
You are the manager of a medium-sized farm with 100 acres of workable land. You can farm the land yourself, rent the land to ano
Ainat [17]

Answer:

The opportunity cost for a year will be $240,000.

Explanation:

The opportunity cost of any decision is the second-best alternative that is given up or sacrificed.  

Here, the manager has a farm of 100 acres of land.  

If he sells it to a developer for $40,000 per acre, he will get $4,000,000 for the whole land.  

He can invest this amount and get an interest of 6% per year.  

The opportunity cost of keeping the farm to the manager himself will be

= 6% of $4,000,000

= \frac{6}{100}\ \times\ \$ 4,000,000

= $240,000

3 0
3 years ago
How much would you have to deposit today if you wanted to have $54,000 in five years? Annual interest rate is 8%. (PV of $1. FV
mestny [16]

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

A) How much would you have to deposit today if you wanted to have $54,000 in five years? The annual interest rate is 8%.

We need to use the following formula:

PV= FV/(1+i)^n

PV= 54,000/(1.08^5)= $36,751.49

B) Assume that you are saving up for a trip around the world when you graduate in two years. If you can earn 7% on your investments, how much would you have to deposit today to have $14,500 when you graduate?

PV= 14,500/1.07^2= $12,664.86

C) Calculate the future value of an investment of $643 for eleven years earning an interest of 8%.

FV= PV*(1+i)^n

FV= 643*1.08^11= $1,499.24

D) Would you rather have $643 now or $1,000 eleven years from now?

It depends on the interest rate. We will assume 8%.

PV= 1000/1.08^11= 428.88

It is better to have $643 today.

5 0
3 years ago
Collingsworth, Inc. produces 3 products: AKM, BWT, and CPQ. Product AKM requires 700 purchase orders, Product BWT requires 1,080
marusya05 [52]

Answer:

Allocated MOH= $100,800

Explanation:

<u>First, we need to calculate the predetermined allocation rate for ordering and receiving:</u>

<u></u>

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Ordering and receiving= 504,000 / (700 + 1,080 + 1,720)

Ordering and receiving= $144 per order

<u>Now, we allocate to product AKM:</u>

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 144*700

Allocated MOH= $100,800

5 0
2 years ago
Select the correct answer
arlik [135]
It is B. passive income
5 0
2 years ago
Read 2 more answers
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