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Lostsunrise [7]
3 years ago
12

The standard deviation of return on investment A is .10, while the standard deviation of return on investment B is .04. If the c

orrelation coefficient between the returns on A and B is -.50, the covariance of returns on A and B is _________.
Business
1 answer:
leva [86]3 years ago
8 0

Answer: The Covariance in the portfolio is -0.002

Explanation: Covariance is a significant tool in modern portfolio theory that is use to check risk and volatility, and to determine the relationship between the movement of assets returns in the portfolio.

CALCULATE COVARIANCE:

Correlation of sample = Covariance of sample ÷ (standard deviation of sampleA × standard deviation of sampleB)

Standard deviation A = 0.10

Standard deviation B = 0.04

Correlation = -0.5

Therefore;

Covariance = (0.04 × 0.10) × (-0.5) = -0.002

The Covariance is -0.002, which shows a negative since, thant means the two assets does not move in the same direction in the portfolio. Which means that, when asset A generate profit, asset B will generate loss to cancel the profit.

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Annalise received financial aid offers from two universities.
kogti [31]

Answer:

Option A will save her $4,500

Explanation:

Calculation to determine Which statement about the costs per year is true

First step is to calculate OPTION A cost per year

Option A Costs per Year

Work-Study $4,000

Tuition & Fees $10,000

Scholarship & Grants $7,000

Room & Board $11,500

Total $18,500

Second step is to calculate OPTION B cost per year

Option B Costs per Year

Work-study $4,000

Tuition & Fees $28,000

Scholarship & Grants $18,000

Room & Board $9,000

Total $23,000

Now let determine Which statement about the costs per year is true

Costs per year= $23,000-$18,500

Cost per year=$4,500

Therefore the statement about the costs per year that is true will be: Option A will save her $4,500 because the cost per year for OPTION A is LESS COSTLY than that of option B by $4,500.

7 0
3 years ago
Suppose the U.S. dollar is defined by law as being equal to 0.1 ounce of gold. Further suppose the British pound is defined as b
motikmotik

Answer:

The exchange rate is $1 = 2 pounds.

Explanation:

The exchange rate is the relative value of the two currencies. In other words, the amount of one currency you can exchange for another currency.  

The US dollar is defined as equal to 0.1 ounces of gold.  

The British Pound is defined as equal to 0.05 ounce of gold.  

The exchange rate between the two countries is

= \frac{value\ of\ US\ dollar}{value\ of\ British\ Pound}

= \frac{0.1}{0.05}

= 2

So the exchange rate is $1 = 2 pounds. This means that $1 can be used to exchange 2 pounds.

6 0
3 years ago
At a price of $1.00, a local coffee shop is willing to supply 100 cinnamon rolls per day. At a price of $1.20, the coffee shop w
kykrilka [37]

Answer:

a. 2.20

Explanation:

The computation of the price elasticity of supply is shown below;

Here,

P1 = $1 Q1 = 100

P2 = $1.20 Q2 = 150

We know that  

Price elasticity  = percentage change in quantity supplied ÷ percentage     change in price

where  

Percentage change in quantity supplied = (Q2-Q1)÷(Q2+Q1) ÷ 2)×100

= (150-100) ÷(150+100) ÷ 2)×100

= 40

And,  

Percentage change in price is

= (P2-P1) ÷ (P2+P1) ÷ 2)×100

= ($1.20 - $1) ÷ ($1.20 + $1) ÷ 2)×100

= 18.1818

So, price elasticity of supply is

= 40 ÷ 18.1818

= 2.20

5 0
3 years ago
Read 2 more answers
Shaw Industries, a giant carpet manufacturer, increases its control over raw materials by producing much of its own polypropylen
Karo-lina-s [1.5K]

Answer:

<u>Using related diversification to achieve value by integrating vertically in order to acquire market power.</u>

Explanation:

First, let's understand what are the stages of a supply chain, they are:

  1. commodities
  2. manufacturing
  3. distribution
  4. retail

In this regard, we can see that Shaw Industries controls more than one stage of its supply, commodities and manufacturing chain, which characterizes vertical integration.

Therefore, the most appropriate alternative to the question is that the company gains a greater market gain with this strategy because it increases the management and quality control, by ensuring that the inputs and processes are in accordance with its standards, which guarantees a product of higher quality and consequently better positioned on the market.

6 0
3 years ago
Reasons why marketing is important to a business
Allisa [31]

Answer:

5 reasons why marketing is so important

Marketing informs. To attract consumers in a crowded marketplace, your target audience needs to know why they should choose your business over someone else's. ...

Marketing engages. ...

Marketing builds reputations. ...

Marketing sells. ...

Marketing grows businesses.

Explanation:

From Google

7 0
3 years ago
Read 2 more answers
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