Answer:
=> fraction of the portfolio that should be allocated to T-bills = 0.4482 = 44.82%.
=> fraction to equity = 0.5518 = 55.18%.
Explanation:
So, in this question or problem we are given the following parameters or data or information which are; that the utility function is U = E(r) – 0.5 × Aσ2 and the risk-aversion coefficient is A = 4.4.
The fraction of the portfolio that should be allocated to T-bills and its equivalent fraction to equity can be calculated by using the formula below;
The first step is to determine or Calculate the value of fraction to equity.
Hence, the fraction to equity = risk premium/(market standard deviation)^2 - risk aversion.
= 8.10% ÷ [(20.48%)^2 × 3.5 = 0.5518.
Therefore, the value for fraction of the portfolio that should be allocated to T-bills = 1 - fraction to equity = 1 - 0.5518 =0.4482 .
Answer and Explanation:
a. The computation of overhead rate using activity-based costing is shown below:-
Cutting = Cost ÷ Machine Hours
Cutting = $381,600 ÷ 228,000
= $1.67 Per Machine Hours
Design = Cost ÷ No. of Setup
Design = $620,100 ÷ 1,710
= $362.63 per set up
The computation of the amount of Overhead Allocated is shown below:-
Wool:
114,000 × $1.67
= $190,380
= 1,140 × $362.63
= $413,398
Total = $603,778
Cotton:
114,000 × $1.67
= $190,380
= 570 × $362.63
= $206,669
Total = $397,049
The computation of amount allocated using traditional approach is shown below:- = $1,001,700 ÷ 2
= $500,850
Overhead Allocated to Wool = $500,850
Cotton = $500,850
The factor that might lead to a decline in the supply of cowboy boots is the price that consumers are willing to pay for cowboy hats has increased.
<h3>What leads to a decrease in supply?</h3>
Factors other than a change in the price of A good would lead to either an increase or decrease in supply or a shift of the supply curve. Such factors include :
- A change in the price of input
- A change in the number of suppliers
- Government regulations
- Technological changes
- A change in the price of substitute goods.
To learn more about the change in supply, please check: brainly.com/question/15835771
Answer:
the dollar cost of the annual interest on the government's total debt assuming the interest rate and debt is $356 billion
Explanation:
Dollar cost of annual interest on total debt = Total debt for the year x Average interest rate
= $17.3 trillion x 2%
= $17,300 billion x 2%
= $346 billion
This value is closest to option (2).
Answer:
C. $ 0.
Explanation:
Provided that
Book value of the old machine = $81,300
The Fair value of the old machine = $91,400
So, we can see that there will be a gain of
= Fair value - book value
= $91,400 - $81,300
= $10,100
But this gain would not be recognized in case of lacking commercial substance. So, there would be zero gain or loss
