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daser333 [38]
3 years ago
6

You have $100,000 to invest in either Stock D, Stock F, or a risk-free asset. You must invest all of your money. Your goal is to

create a portfolio that has an expected return of 10.6 percent. Assume D has an expected return of 14.1 percent, F has an expected return of 10 percent, and the risk-free rate is 5.55 percent. If you invest $50,000 in Stock D, how much will you invest in Stock F
Business
1 answer:
gogolik [260]3 years ago
7 0

Answer:

Amount of Stock F to buy $17,420

Explanation:

The risk-free asset is one minus the weight of the other two assets. Therefore Mathematically, the expected return of the portfolio will be:

E[Rp] = 0.106 = 0.50(0.141) + wF(0.100) + (1 – 0.50 – wF) (0.0555)

0.106 = 0.50(0.141) + wF(0.100) + 0.0555 – 0.02775 – 0.0555wF= 0.1742

Hence, the weight of the risk-free asset is:

wRf= 1 – 0.50 – 0.1742= 0.3258

And the amount of Stock F to buy is:

Amount of stock F to buy = 0.1742($100,000) = $17,420

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3 years ago
Ashley's Coffee Shop makes a blend that is a mixture of two types of coffee. Type A coffee costs Ashley $4.30 per pound, and typ
Over [174]

Answer:

Ashley used 87 pounds of type B coffee

Explanation:

4.3a  + 5.9b = 749.80

a + b = 142

b = 142-a

4.3a  + 5.9(142-a) = 749.80

4,3a  + 5.9(142-a) = 749.80

4.3a  + 837.8 - 5.9a = 749.80

4.3a - 5.9a = 749.80 - 837.80

-1.6a= -88

a= -88 / 1.6 = 55

55  + b = 142

b=  142-  55 = 87

That is the way we get how many pounds of type B coffee Ashley used

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3 years ago
Enterprise systems help managers and companies improve their performance by
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3 0
2 years ago
XYZ has 400,000 shares of common stock outstanding, a P/E ratio of 8, and $500,000 in net income. The board of directors has jus
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Answer:

$1,000

Explanation:

If total earnings are $500,000 and there are 400,000 shares, the original price per share is determined by:

P=\frac{P}{E}*E\\ P=8*\frac{\$500,000}{400,000} \\P=\$10\\

The value of your invest will be same before and after the split, what will change is the number of shares and their individual price.

If you owned 100 shares at $10 each, the value of your investment is:

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Your corporation has the following cash flows: Operating income $250,000 Interest received $ 10,000 Interest paid $ 45,000 Divid
masha68 [24]

Answer: $88,400

Explanation:

My corporation Plc

Corporate tax for the year

Operating incom $250,000

Interest received $10,000

Interest paid ($45,000)

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Interest paid is in bracket because it's a deduction.

70% of dividends received is excepted from tax

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Dividends paid out is after tax has been deducted.

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