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Ghella [55]
3 years ago
7

Assume that the economy has three types of people. 20% are fad followers, 75% are passive investors, and 5% are informed traders

. The portfolio consisting of all informed traders has a beta of 1.4 and an expected return of 16%. The market has an expected return of 10% and the risk-free rate is 4%. The alpha for the informed investors is closest to:
Business
1 answer:
Ratling [72]3 years ago
8 0

Answer:

3.6%

Explanation:

The computation of the alpha for the informed investors is shown below:

As we know that

Expected rate of k = Risk free rate of return + Beta × (Market rate of return - Risk free rate of return) + Alpha

16% = 4% + 1.4 × (10% - 4%) + Alpha

16% = 4% + 8.4% + Alpha

16% = 12.4% + Alpha

So,

Alpha = 3.6%

We simply applied the above formula to determine the alpha

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I shall replace the salesman after discovering that a salesman is receiving kickbacks from my largest customer, analog concerns.

Answer: Option A

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In the above mentioned scenario, the salesman is given a kickbacks - "advantages" for either the good relationship that they have maintained with the client or for luring them to always provide them the product/service with discounts.

So in this situation I would obviously replace the salesman because such situations cannot be ignored and there is no assurance that the salesman will not take kickbacks henceforth. And asking for a cut is ethically wrong as the salesman getting the kickbacks.

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3 years ago
At its current output level, Pretty Flowers Florist has average fixed costs equal to $5.40 and average variable costs equal to $
lapo4ka [179]

Answer:

The correct option is D: $8.60

Explanation:

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Average total cost Pretty Flowers = Average fixed cost of Pretty Flowers + Average variable costs of Pretty Flowers

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3 0
3 years ago
Read 2 more answers
Which VALS segment is most likely to have a top of the line brand new (2015) SurfaceTM Book--the Ultimate Laptop--from Microsoft
padilas [110]

Answer:

correct option is a. Innovators

Explanation:

solution

As here VALS some are as

  1. high resources : Innovators
  2. ideal : thinker and believer
  3. achievement : achiever and strivers
  4. self expression : experiences and maker
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so here correct option is a. Innovators

3 0
3 years ago
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Vikki [24]

Answer:

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Brand performance is the concept that compares and contrasts the goals a brand sets and how it meets those targets.

Therefore, brand performance is the concept that describe how well a market fulfills customers needs.

The answer is D

6 0
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In a certain year, the aggregate amount demanded at the existing price level consists of $100 billion of consumption, $40 billio
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Answer:

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Explanation:

Nominal GDP is currently $170 billions (= $100 billions + $40 billions + $20 billions + $10 billions).

Since full employment GDP = $120 billions, the nominal GDP is much higher ($170 billions > $120 billions). So the government must try to cool the economy and the two main ways it can do it is by reducing government spending or by raising taxes which will lower private consumption.

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