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Ivenika [448]
3 years ago
11

A portfolio has 30% of its value in IBM shares and the rest in Microsoft (MSFT). The volatility of IBM and MSFT are 35% and 30%,

respectively, and the correlation between IBM and MSFT is 0.5. What is the standard deviation of the portfolio
Business
1 answer:
Masteriza [31]3 years ago
5 0

Answer:

30.51%

Explanation:

The computation of the standard deviation is shown below:

Data provided in the question

Weightage in IBM = 30% = WI

Weightage in MFST = 100 - 30% = 70% = WM

The Volatility in IBM = 35% = VI

The Volatility in MFST = 30% = VM

Correlation = 0.5 = C

Based on the above information

The standard deviation is

= \sqrt{(VI^2\times WI^2) + (VM^2 \times WM^2) + (2 \times VI \times WI \times VM \times WM \times C)}

= \sqrt{(0.35^2\times 0.30^2) + (0.35^2 \times 0.70^2) + (2 \times 0.35 \times 0.30\times 0.30 \times 0.70 \times 0.5)}

= 30.51%

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Which one of the following should earn the most risk premium based on CAPM?
Nina [5.8K]

Answer:

The portfolio with a beta of 1.38 should earn the most risk premium based on CAPM.

The correct answer is B

Explanation:

A diversified portfolio with returns similar to the overall market will not earn the most risk premium because its beta is equal to 1.

A stock with a beta of 1.38 produces the most risk premium because any stock with the highest beta gives the highest risk-premium. This is the correct answer.

A stock with a beta of 0.74 does not provide the highest risk premium.

Us treasury bill does not provide any risk premium since it is the risk-free rate.

A portfolio with a beta of 1.01 does not produce the highest risk premium.

5 0
3 years ago
A degree of aggressive procurement involvement not normally encountered in supplier selection refers to ____. Group of answer ch
Dmitriy789 [7]

Answer:

supplier development.

Explanation:

A degree of aggressive procurement involvement not normally encountered in supplier selection refers to supplier development.

Supplier development is a business strategy and it involves the process of working one-to-one basis or closely with certain suppliers in order to improve and boost their performance for the benefit of growing and developing an organization.

It is a concept that is also similar to reverse marketing in business management. It is a strategic business plan which is aimed at improving the quality and performance of suppliers by availing them resources they need to achieve success and have competitive advantage in the supply chain.

For instance, a buying organization might decide to implore suppliers to enter an emerging market.

Also, another example of the supplier development is, in order to prevent the wide-spread of Corona virus, CDC is ensuring its suppliers of ppe (personal protective equipment) are continuously supplying face masks.

8 0
3 years ago
George is ready to launch a designer tie collection under his own brand name. He now has to decide the right market price for hi
kondor19780726 [428]

Answer:

B. the amount the customer can pay

Explanation:

Pricing is one of the 4 P's of marketing mix. It involves assigning the right value to one's goods and services. Choosing the right price on a product will determine the success of the business because if it is too high, customers will not afford it and therefore not be willing to buy it. However, if it is priced right and it meets their needs, they will most likely buy it , making choice B correct.

8 0
3 years ago
Suppose the working age population of a fictional economy, Jessica Town, falls into the following categories: 100 are retired ho
Studentka2010 [4]

Answer: 30.1%

Explanation:

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The rate is also based on the Labor force which is the portion of the population that is <u>able</u> and <u>willing</u> to work. Retirees are not included in this measure. Those who are not looking are not willing.

Labor Force = 50 full-time + 15 part-time + 28 unemployed

= 93 people

Unemployment rate:

= 28 / 93 * 100

= 30.1%

4 0
3 years ago
What is the answer ?
sergeinik [125]
Who freaken knows ????? :)
3 0
3 years ago
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