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lisov135 [29]
3 years ago
6

The expected rates of return on portfolios A and B are 11% and 14%, respectively. The beta of A is 0.8 and the beta of B is 1.5.

The T-bill rate is currently 6%, while the expected rate of return on S&P500 index is 12%. The standard deviation of portfolio A is 10% annually, while that of B is 31%, and that of the index is 20%. If you currently hold a market index portfolio, would you choose to add either of these portfolios to your holdings? Discuss your answer.
Business
1 answer:
Zigmanuir [339]3 years ago
4 0

Answer:

Portfolio B has a higher return but more volatile stocks. However it depends on how the individual can tolerate risks.

Explanation:

Expected return= free return + Beta (Expected rate of return – risk free rate)

Portfolio A

6%+ +.8*6%

= 6%+4.8%= 10.8%

Portfolio B

6%+1.5(6%)

6%+9%= 15%

It depends on different factors. Portfolio B has a higher return but more volatile stocks. However it depends on how the individual can tolerate risks.

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If you are willing to purchase a house for $500,000 and you purchase the house for $500,000, this transaction will generate:
wel

Answer:

c. $0 worth of buyer surplus and unknown amount of seller surplus

Explanation:

Given that

Selling price of house = $500,000

The purchase value of house =$500,000

By considering the above information,  the purchase and sales value are the same which reflects that the buyer surplus is zero and there is no definite amount or unknown amount of seller surplus as the data is not given.

Hence, the correct option is c.  

4 0
3 years ago
Which of these terms is most closely related to tradeoffs?
ohaa [14]
Hello!

You forgot the alternatives!

incentives 
<span>margin </span>
<span>markets </span>
<span>scarcity
</span>
The term that is most closely related to trade-off, from the list above, is: scarcity. Scarcity is the condition that moves the trade-offs, it determines the quantity of each product you need or have. So, for example, if you need a product that you don't have enough and another that you have in excess, you can exchange it with someone that have interest in your product and has the one that you need.

Hugs!
7 0
3 years ago
Some federal grants, such as categorical grants, ____________, while others, such as block grants, ____________.
Setler79 [48]
Search on google as this is not possible to answer in typing
6 0
3 years ago
14-2B (Issuance and Retirement of Bonds) StarCenter Co. Is building a new music arena at a cost of $5,600,000. It received a dow
mezya [45]

Answer:

there are no requirements, but I assume that they ask about issuance costs and their amortization:

market price of the bonds:

PV of face value = $5,000,000 / (1 + 10%)²⁰ = $743,218

PV of coupon payments = $400,000 x 8.5136 (PV annuity factor, 10%, 20 periods) = $3,405,440

market price = $4,148,658

Journal entry to record issuance and bond issue costs

January 1, 2013

Dr Cash 4,088,658

Dr Discount on bonds payable 851,342

Dr Bond issue costs 60,000

    Cr Bonds payable 5,000,000

amortization of bond discount and issue costs = ($4,088,658 x 10%) - $400,000 = $8,865.80 ≈ $8,866

allocation to bond issue costs = ($60,000 / $911,342) x $8,866 = $583.71  ≈ $584

allocation to bond discount = $8,866 - $584 = $8,282

Journal entry to record first coupon payment

January 1, 2014

Dr Interest expense 408,866

    Cr Cash 400,000

    Cr Discount on bonds payable 8,282

    Cr Bond issue costs 584

4 0
2 years ago
Paul White was assigned to a senior employee responsible for instructing new computer programmers. Because of this senior employ
VladimirAG [237]

Answer:

On the job

Explanation:

Paul has experienced ‘On the job’ training; the employees can gain proficiency with the skills that are required to be performed in the real work conditions and furthermore gets familiar with the workplace. Likewise, the organisation does not have to pay extra cost of setting up a study hall arrangement for granting preparing to the workers; they acquire training on the job.

5 0
3 years ago
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