Answer and Explanation:
The computation is shown below:
1. VaR = Expected return - z × Standard deviation
= 13% - 1.645 × 20%
= -19.90%
Therefore the option a is the correct answer.
2) Now the correlation coefficient is
Variance of the portfolio = (weight of A × Standard deviation 1)^2 + (weight of B × Standard deviation 2)^2 + (2 × weight of A × weight of B × Standard deviation 1 × Standard deviation 2 × correlation 1 and 2)
3.80% = (60% × 24%)^2 + (40% × 18%)^2 + (2 × 60% × 40% × 24% × 18% × correlation 1 and 2)
So the correlation is 0.583
<u>The reason that Pablo Picasso, become wealthy during his lifetime and the artist, Vincent van Gogh, remain poor his entire life:</u>
Pablo Picasso and Vincent van Gogh had more features in common. They had unanimously indistinct style of arts which had become immediately identifiable.
In spite of all that, Picasso died as a rich man owning an estate which is estimated at nearly 750 million dollar whereas Van Gogh died as a pauper.
Studies claim that the reason behind this would be that, Van Gogh remained to be a loner and socially inactive. He was depending on his brother to meet the social world and in contrast Picasso was a charismatic active member in various social clubs where her had multiple number of contacts and connections.
It's been said that Pablo Picasso was a hub who had a vast network of social lines and Vincent Van Gogh was a silent or solitary node.
But now, the paintings of both the greatest artists were well spoken and sell for more than 100,000,000 US Dollars.
Answer:
Times interest earned (TIE) = 7.4 times
Explanation:
The times interest earned (TIE) ratio is a measure used to analyze the company's ability to meet its debt obligations on the basis of its current income level. The TIE ratio is calculated as follows,
Times Interest Earned (TIE) = EBIT / Total Interest expense
Where,
- EBIT is the earnings of the company before interest and tax
To calculate TIE, we first need to determine the EBIT. EBIT can be calculated by backward working. Thus, EBIT is:
EBIT = Net income + tax + interest expense
EBIT = 240000 + 80000 + 50000
EBIT = $370000
Times interest earned (TIE) = 370000 / 50000
Times interest earned (TIE) = 7.4 times
Answer:
I would prefer Asset B
Explanation:
A risk averse investor is the one who prefers lower amount of returns with known or specific risks instead of the higher amount of returns with unknown risks. So, from among the various level of risks, the investor will be preferring the alternative with the least interest.
So, in this case,
In Asset A: pay a return of $2,000 and at 20% of time and the $500 at 80% of time.
In Asset B: pay a return of $1,000 and at 50% of time and the $600 at 50% of time.
So, I would prefer, Asset B as it has low return but have a known risk that is of 50 -50.
Hi I think it might be the second option: <u>You can specialize in mechanics and still be able to feed your family without growing your own food.</u> I say this because the key word specialization used in the question and specialize.
Honestly taking a test with this same question at the moment and i am just taking a wild guess here. Im sorry if i got it wrong but good luck.
