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Harman [31]
3 years ago
8

An investor invests 70% of her wealth in a risky asset with an expected rate of return of 15% and a variance of 0.05 and she put

s 30% in a Treasury bill that pays 5%. Her portfolio's expected rate of return and standard deviation are __________ and __________ respectively.
Business
1 answer:
Mazyrski [523]3 years ago
6 0

Answer:

The portfolio's expected return is 12% and the standard deviation of the portfolio is 15.65%.

Explanation:

The expected rate of return of the portfolio is the weighted average of the individual stock returns that form up the portfolio. The formula for a two stock portfolio return is,

Portfolio return = wA * rA + wB * rB

Where,

  • w represents weight of the stocks in the portfolio
  • r represents the return of the stocks in the portfolio

Portfolio return = 0.7 * 0.15  +  0.3 * 0.05  =  0.12 or 12%

The portfolio which consists of a risky and a risk free asset has a standard deviation equal to the weight of the risky asset multiplied by its standard deviation. The risk free asset has no standard deviation. Thus, the formula for a portfolio standard deviation for such a portfolio is,

Standard deviation = weight of risky asset * standard deviation of risky asset

Standard deviation of portfolio = 0.7 * √0.05

Where standard deviation is the square root of variance.

Standard deviation of portfolio = 0.1565 or 15.65%

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As the manager of Margarita Mexican​ Restaurant, you must deal with a variety of business transactions. Provide an explanation f
Shalnov [3]

Answer:

A. Debit Equipment and credit Cash.

  • You purchase equipment and you pay in cash.

B. Debit Dividends and credit Cash.

  • You paid cash dividends.

C. Debit Wages Payable and credit Cash.

  • You paid wages that you owed to your employees. Generally wages are paid at the end of the week and not all months end on a weekend. So you must record wages payable until you actually pay the wages.

D. Debit Equipment and credit Common Stock.

  • You received equipment in exchange for common stock.

E. Debit Cash and credit Unearned Revenue.

  • You received cash in advance for some food that you will deliver in the future.

F. Debit Advertising Expense and credit Cash.

  • You incurred in advertising costs and you paid them in cash.

G. Debit Cash and credit Service Revenue.

  • You sold meals and your clients paid you in cash.

7 0
3 years ago
What good or services is “AMAZON” KNOW FOR
Svet_ta [14]

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8 0
3 years ago
An outside supplier has offered to sell 23,000 units of part S-6 each year to Han Products for $22 per part. If Han Products acc
sesenic [268]

Answer:

                                                       Make Buy

Direct material                              85100  

Direct labour                                      253000  

Variable manufacturing overhead     52900  

Fixed manufacturing overhead       69000  

Opportunity cost                               73000  

Purchase cost                                         437000

Total                                               533000   437000

Financial advantage is 96000    

Explanation:

6 0
3 years ago
A study finds that at a price of $10, 100 t-shirts are sold. at a price of $5, 300 t-shirts are sold. how many t-shirts can you
Trava [24]

The number of t-shirts that one can assume are sold at a price of $7 will be 220

<h3>What is price?</h3>

It should be noted that price is the sum of money that one party pays or receives in exchange for another's goods or services. The cost of production may go by another name in some circumstances. If a product is classified as a "good" in a business transaction, its price is most likely to be referred to as such.

In this case, it should be noted that the higher the price of a particular good, there'll be a reduction in the quantity that will be demanded.

Therefore, the most likely value will be $220. In conclusion, the correct option is A.

Learn more about price on:

brainly.com/question/1153322

#SPJ1

A study finds that at a price of $10, 100 t-shirts are sold. At a price of $5, 300 t-shirts are sold. How many t-shirts can you assume are sold at $7?

A. 220

B. 200

C. 180

D. 160

3 0
1 year ago
Jasper Corp. has a selling price of $44, and variable costs of $25 per unit. When 14,600 units are sold, profits equaled $133,00
AURORKA [14]

Answer:

Break-even point in units= 7,600

Explanation:

Giving the following information:

Selling price= $44

Unitary variable cost= $25

When 14,600 units are sold, profits equaled $133,000.

<u>First, we need to calculate the total fixed costs:</u>

Fixed costs= Total contribution margin - net income

Fixed costs= 14,600*(44 - 25) - 133,000

Fixed costs= $144,400

<u>To calculate the break-even point in units, we need to use the following formula:</u>

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 144,400 / (44 - 25)

Break-even point in units= 7,600

5 0
3 years ago
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