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Sergio039 [100]
3 years ago
8

Returns and Actions Kunal Nayyar from London, had $60,000 in investments in the USA at the beginning of the year that consisted

of a diversified portfolio of stocks (40 percent), bonds (40 percent), and cash equivalents (20 percent). His returns over the past 12 months were 14 percent on stocks, 5 percent on bonds, and 1 percent on cash equivalents. What is Kunal's average return for the year? Round your answer to one decimal place. % If Kunal wanted to rebalance his portfolio to its original position, what specific actions should he take?
Business
1 answer:
AlekseyPX3 years ago
5 0

Answer:

Average rate of return is 7.8% , and total amount is $4,680

If Kunal wanted to rebalance his portfolio to its original position, he needs to transfer $672 (= $25,872 - $25,200) from stock account to bond account  and $816 ( = $12,936 - $12,120) from stock account to cash.

Explanation:

Total return for year = 14% * (40% of $60,000) + 5% * (40% of $60,000+ 1% *(20% of $60,000) = $4,680

Average rate of return = $4,680/ $60,000 = 7.8%

At beginning, the amount in per diversified portfolio is as below:

  • Amount invested in stock = 40% * $60,000 = $24,000
  • Amount invested in bond = 40% * $60,000 = $24,000
  • Amount in cash = 20% *$60,000 = $12,000

After receiving return, the amount in per diversified portfolio is as below:

Amount invested in stock = $24,000 *(1+14%) = $27,360

  • Amount invested in bond = $24,000 *(1+5%) = $25,200
  • Amount in cash = $12,000 * (1 + 1%) = $12,120

And amount in Kunal’s investment fund  = $27,360 + $25,200 + $12,120 = $64,680

 

If Kunal wanted to rebalance his portfolio to its original position, the amount in per diversified portfolio is as below:

Amount invested in stock = 40% * $64,680 = $25,872

  • Amount invested in bond = 40% * $64,680 = $25,872
  • Amount in cash = 20% *  $64,680 = $12,936

⇒ Kunal needs to transfer $672 (= $25,872 - $25,200) from stock account to bond account  and $816 ( = $12,936 - $12,120) from stock account to cash.

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Multiple Choice Question 71 Boswell Company manufactures two products, Regular and Supreme. Boswell’s overhead costs consist of
seropon [69]

Answer:

Allocated MOH=  $5,250,000

Explanation:

Giving the following information:

Overhead costs:

Machining = $5,000,000

Assembling= $2,500,000

Regular:

Direct labor hours= 10,000

Machine hours= 10,000

Number of parts= 90,000

Supreme:

Direct labor hours= 15,000

Machine hours= 30,000

Number of parts= 160,000

First, we need to calculate the estimated overhead rate for each department. For Machining, we will use the machine hours. For Assembling, we will use the direct labor hours.

To calculate the estimated manufacturing overhead rate we need to use the following formula:

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

<u>Machining:</u>

Estimated manufacturing overhead rate= 5,000,000/ (10,000 + 30,000)= $125 per machine hour

<u>Assembling:</u>

Estimated manufacturing overhead rate=  2,500,000/(25,000)= $100 per direct labor hour

Now, we can allocate overhead to supreme.

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

Allocated MOH= (125*30,000) + (100*15,000)= $5,250,000

6 0
2 years ago
The Internal Rate of Return (IRR) represents which of the following: Multiple Choice The discount rate that must be lower than t
zmey [24]

Answer:

The discount rate that makes the net present value equal to zero.

Explanation:

The internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested.

It is the discount rate that makes the net present value equal to zero.

I hope my answer helps you

8 0
3 years ago
Considering the needs of a global audience is essential to success in the hospitality and tourism industry?
ozzi

Answer:

True

Explanation:

In simple words, the hospitality and tourism industry refers to the activities related to accommodation, restaurant and tourism etc. In such industries the main focus of the companies is the comfort and joy of their clients. This becomes difficult to implement as every individual have different needs and circumstances. Thus, the planning of activities should be made in such a way that it suited the global audience.

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2 years ago
Which adjective best describes you at work? a.unique b.orderly
UkoKoshka [18]

Answer:

B

Explanation:

being unique can be good at work but making sure you're organized doing your job is vital.

5 0
3 years ago
While stocking the shelves with a new soup, the store manager notes a difference in price between the 16-ounce can and the 32-ou
asambeis [7]

Answer:

The correct answer is: Cost-Plus Pricing Strategy.

Explanation:

To begin with, a ''Cost-Plus'' is the name that a pricing strategy receives in the field of marketing and business that mainly focuses on the pricing of a product by the cost of it plus a certain porcentage of benefit, considering this last one as the benefit margin. Moreover, this type of pricing strategy is one of the most common ones in the field, typically the businesses use this type of pricing strategy due to the fact that it is easy to establish and it does not consider complex terms.

Secondly, in this case where the manager notices such a difference in the prices of the two cans is due to the fact that the manufacturer put less commodities and less effort in the can of 16-ounce rather than in the other can of 32-ounce where there is more soup and therefore there is more cost in that can, establishing that a higher price must put in that one.

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