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tester [92]
3 years ago
14

A mutual funds company’s newsletter says, "A well-diversified portfolio includes assets with low correlations." The newsletter i

ncludes a table of correlations between the returns on various classes of investments. For example, the correlation between municipal bonds and large-cap stocks is 0.50, and the correlation between municipal bonds and small-cap stocks is 0.21.(a) Rachel invests heavily in municipal bonds. She wants to diversify by adding an investment whose returns do not closely follow the returns on her bonds. Should she choose large-cap stocks or small-cap stocks for this purpose? Explain your answer.(b) If Rachel wants an investment that tends to increase when the return on her bonds drops, what kind of correlation should she look for?
Mathematics
1 answer:
LekaFEV [45]3 years ago
8 0

Answer:

The less the correlation between two variables means the more different their output is.

A.) If Rachel wants to diversify her investment by investing on bonds that do not closely follow the returns on the bond. then she should invest in the stocks with low correlation with bonds. I.e: small cap stocks.

B.) Similarly, due to low correlation, small cap bonds will increase ( comparatively to large cap bonds) as the return on her bonds wil drop and vice versa.

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A researcher would like to evaluate the claim that large doses of vitamin C can help prevent the common cold. One group of parti
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Answer: The dependent variable is discrete.

Step-by-step explanation:

There are different types of variables. Variables can be classified into two main groups: qualitative and quantitative.

Qualitative variables are those who represent attributes. For example, flowers of 3 different colors: yellow, orange and blue. Also, when they haven’t an order or a hierarchy, they are called nominal, as in the previous flowers's example. When they have a hierarchy associated, they are called ordinal (you can distinguish a natural order), for example: small, medium, large.  

Quantitative variables are those that represent quantities, and they can be discrete or continuous. A variable is discrete when only certain finite values ​​are possible. This variables are used to represent counts, like the in the example: number of colds within a winter season, or for example, number of students in a class, number of plants per acre, etc.

On the other hand, when a variable is continuous, infinite values ​​can be found between two values. They are measure in continuous scales. For example, the plant’s height: it could be take any continuous values, like 10.3 cm, 15 cm, 17.99 cm.

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$10 000 is borrowed at 10.5% per annum interest. How much interest is owed at the end of the first 10 months?
Leviafan [203]

Answer:

$875 is the interest owed at the end of the first 10 months

Step-by-step explanation:

In this question, we are to calculate how much interest is owed in the first ten months.

There are several routes to this but the one i will like to use is as follows.

we shall calculate the amount owed for a year, afterwards we did use this amount by 12 since there are 12 months in a year. Now we multiply whatever answer we have by 10 to get the amount owed in 10 months.

To calculate the interest, we use the simple interest formula.

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I = PRT/100

where P is the amount borrowed which is $10,000

R is the interest rate which is 10.5% per annum

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I = (10,000 * 10.5 * 1)/100 = $1050

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This amount in 10 months will be 87.5 * 10 = $875

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