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vekshin1
3 years ago
9

Suppose that Mike has been holding asset B. (That is, Mike is holding a portfolio that entirely consists of asset B). Today, a s

tock broker came to Mike and recommended that he add a little bit of asset A into his portfolio (for example, 80% of asset B and 20% of asset A). Mike rejected this suggestion because he thinks that it is not a good idea to add a riskier asset into his portfolio -- based on the answers for Q3 and Q4, he knows that asset A is riskier (than asset B) in the sense that it has a higher standard deviation. Do you think that rejecting the stock broker’s suggestion was a correct decision?
Business
1 answer:
coldgirl [10]3 years ago
3 0

Answer:

Suppose that Mike has been holding asset B. (That is, Mike is holding a portfolio that entirely consists of asset B). Today, a stock broker came to Mike and recommended that he add a little bit of asset A into his portfolio (for example, 80% of asset B and 20% of asset A). Mike rejected this suggestion because he thinks that it is not a good idea to add a riskier asset into his portfolio -- based on the answers for Q3 and Q4, he knows that asset A is riskier (than asset B) in the sense that it has a higher standard deviation. Do you think that rejecting the stock broker’s suggestion was a correct decision- No

Explanation:

The returns that the portfolio can generate needs to be analyzed by Mike, and this can be achieved by adding the riskier asset.

If adding a little bit of the riskier project would lead to an increase in the returns by a greater proportion, then it may be beneficial to do the same. Therefore. Mike should consider the option before rejecting it completely.

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If the Fed sells​ $2 million of bonds to the First National​ Bank, what happens to reserves and the monetary​ base?
Sindrei [870]

Answer:

Reserves fall by $2 million, and the monetary base falls by $2 million.

Explanation:

In the books of First National​ Bank, the purchase of $2 million of bonds by First National​ Bank, from the Federal Reserve means there is a reserve with the Federal Reserve represented by security which stands as asset.

In the books of the Federal Reserve, The sales of bonds to First National​ Bank will create a liability from the reserve assets.

See attached for the T-accounts explain the answer    

Download docx
4 0
3 years ago
Among the budget cuts that the city council is considering is a 5 percent reduction in funds for secondary education. As the pri
Elina [12.6K]

Answer:

1 - What solution would you offer if you were Stella and there were budget cuts in your school?

Instead of cutting the class for bright students, all three classes should continue, but with fewer funds. In other words, the funds should be reduced accross the classes.

2 - Is Stella right that bright kids will do well no matter what? Explain your answer.

She is partly right. Bright kids are likely to do well in most situations, however, this does not mean that all bright kids will do well in most situations, or that they will do better in an average classroom, than in a classroom that is catered to them.

3 - At what age is intelligence set? Is there anything you can do to improve your intelligence score on an IQ test?

According to most recent research, the brain seems to mature when a person is in the mid-20s, however, this does not mean that intelligence is "set" at that moment. Intelligence can be improved during most of adult life.

To do better on an IQ test, a person should have healthy habits, and should also incurr in metal stimulation: puzzle, mental games, studying a language, and so on.

4 - Should gifted students and below average students be integrated into the same class? Explain.

Ideally no. If the students are very gifted, they will simply get bored. However, in case it happens, it can also have a positive effect and that is the bright students will probably end up helping the average students.

5 0
3 years ago
Utility bills change each monthly, so these are called _____ expenses.
Degger [83]
Answer: C. hope this help!!!!!
8 0
3 years ago
Read 2 more answers
If the price elasticity of demand for Mountain Dew is 4.4 then
taurus [48]

If the price elasticity of demand for Mountain Dew is 4.4 then "mountain dew has a high price elasticity of demand".

<u>Answer:</u> Option D

<u>Explanation:</u>

In economics "Price elasticity of demand" (PED) is a metric required to illustrate the flexibility or elasticity of a product or service's required quantity to increase its value when nothing but the value of product vary. When mountain dew have price elasticity of demand is 4.4 this follows that a price increase of 10 percent would result in the quantity needed decline by 44% as illustrated below:

4.4 = (% quantity change) / (% price change)

4.4 = x / 10

x = -4.4 (10) = -44%  here negative sign shows decline in quantity required.

3 0
3 years ago
An investor can invest money with a particular bank and earn a stated interest rate of 13.20%; however, interest will be compoun
mr_godi [17]

The effective compound interest rate is 13.87%.

<h3><u>What is Compound Interest?</u></h3>
  • The interest on a loan or deposit that is calculated based on both the initial principle and the accumulated interest from prior periods is known as compound interest (also known as compounding interest).
  • Compound interest, sometimes known as "interest on interest," is said to have its roots in 17th-century Italy. Compared to simple interest, which is calculated solely on the principal amount, it will cause a sum to grow more quickly.
  • The frequency of compounding determines the rate at which compound interest accumulates.
  • The compound interest increases with the number of compounding periods.
  • For instance, during the same period of time, the amount of compound interest accrued on $100 compounded at 10% yearly will be less than $100 compounded at 5% semi-annually.

Nominal = interest rate

That is Nominal rate is also known as interest rate.

Nominal rate =  13.20%

The invested money is compounded quarterly.

Periodic = 13.2%/4 (quarterly)

Periodic rate = 3.30%

Now,

The interest rate that accounts for compounding over a specific time period is called the Effective Annual Interest Rate (EAR). The rate of interest that an investor can earn (or pay) in a year after taking into account compounding is known as the effective annual interest rate, to put it simply.

Effective annual rate = EFF% = [1 + (0.13200 / 4)]⁴ - 1 = 13.87%

Know more about Compound Interest with the help of the given link:

brainly.com/question/14295570

#SPJ4

3 0
2 years ago
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