Answer:
The beta of the portfolio is 1.312
Explanation:
The portfolio beta is the weighted average of the individual stocks' betas that form the portfolio. To calculate the portfolio beta, we will multiply the individual stock betas by their weightage in the portfolio that can be found by the investment in stock divided by the total investment in portfolio.
Total Investment in portfolio is 25000 + 18000 + 36000 + 11000 = 90000
The portfolio beta is,
Portfolio beta = 25/90 * 1.43 + 18/90 * 0.79 + 36/90 * 1.37 + 11/90 * 1.71
Portfolio beta = 1.312
Answer: The correct answer is "A disproportionate number of high-risk individuals are attracted to buy insurance.".
Explanation: A disproportionate number of high-risk individuals are attracted to buy insurance is a problem that arises in a health insurance market. Due to the greater risk, many insurers choose not to allow these individuals to hire these policies, and those that do offer these products do so with a higher premium than others.
<span>Being expressive to the
audience for a certain essay is vital because it regulates the content that
will give the impression in the writing. The content of an essay that has
a detailed topic will differ depending on the projected audience. Having a fixated
topic is imperative, but having a precise audience is correspondingly significant.</span>
Answer:
Cash (Dr.) $50,000
Lease Receivable (Cr.) $50,000
Explanation:
Lessor is the person who leases the item to gain financial benefit from the asset user lease. Lessee is a person who uses the assets but does not owns it so he pays lease rentals. In the given scenario the lease recoding at inception in the lessor books will be cash debit and lease receivable credit.
Answer:
a. 5.40%
Explanation:
First, I will calculate the new cost of equity for both stock X and Y:
Required rate of return = risk free rate + (beta x market premium)
Re stock X = 8% + (1.6 x 6%) = 8% + 9.6% = 17.6%
Re stock Y = 8% + (0.7 x 6%) = 8% + 4.2% = 12.2%
The difference between the required rate of return = 17.6% - 12.2% = 5.4%
