Under what conditions does servant leadership fail to have a positive impact on followers?

GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export

Consumption spending includes spending by households on goods and services. Consumption spending includes :

spending on durables - e.g. buying a laptop

spending on nondurables - e.g. buying clothes, food

spending on services - e.g. payment of hospital bill

the purchase of a textbook by a student is an example of consumption spending on durable goods

Investment - It includes purchases of goods and services made by businesses in the production of goods and services

Government spending - It includes government consumption expenditure and gross investment. The purchase of a new limousine for the president is an example of consumption expenditure

Net export = export - import

the purchase of hotdog constitutes consumption of non durable goods and this would increase US GDP by $25

7 0

3 years ago

Given the following information, what is the standard deviation of the returns on a portfolio that is invested 40 percent in Sto

olasank [31]

Answer:

The correct option is e. 11.86 percent.

Explanation:

Note: The data in this question are merged together and they are therefore sorted before answering the question. See the attached pdf for the full question with the sorted data.

The standard deviation of the returns on a portfolio can now be calculated using the following steps:

Step 1: Calculation of expected returns under each state of the economy

This can be calculated using the following formula:

Expected return under a state of the economy = (Percentage invested in Stock A * Return of Stock A under the state of the economy) + (Percentage invested in Stock B * Return of Stock B under the state of the economy) + (Percentage invested in Stock C * Return of Stock C under the state of the economy) …………… (1)

Substituting the relevant values into equation (1), we have:

Expected return under Normal = (40% * 14.3%) + (35% * 16.7%) + (25% * 18.2%) = 0.16115

Expected return under Recession = (40% * (-9.8%)) + (35% * 5.4%) + (25% * (-26.9%)) = -0.08755

Step 2: Calculation of expected return of the portfolio

This can be calculated using the following formula:

Portfolio expected return = (Probability of Normal Occurring * Expected Return under Normal) + (Probability of Recession Occurring * Expected Return under Recession) …………………. (2)

Substituting the relevant values into equation (2), we have:

Portfolio expected return = (0.65 * 0.16115) + (0.35 * (-0.08755)) = 0.074105

Step 3: Calculation of the variance of the returns on the portfolio

This can be calculated using the following formula:

Variance of the portfolio = (Probability of Normal Occurring * (Expected Return under Normal - Portfolio expected return)^2) + (Probability of Recession Occurring * (Expected Return under Recession - Portfolio expected return)^2) …………………….. (3)

Substituting the relevant values into equation (3), we have:

Variance of the portfolio = (0.65 * (0.16115 - 0.074105)^2) + (0.35 * (-0.08755 - 0.074105)^2) = 0.014071259475

Step 4: Calculation of the standard deviation of the returns on the portfolio

This can be calculated using the following formula:

Standard deviation of the portfolio = Variance of the portfolio^0.5 ............. (4)

Substituting the variance of the portfolio obtained in step 3 into equation (4), we have:

Standard deviation of the portfolio = 0.014071259475^0.5 = 0.118622339696197, or 11.8622339696197%

Rounding to 2 decimal places, we have:

Standard deviation of the portfolio = 11.86%

This implies the standard deviation of the returns on the portfolio is 11.86%.

Therefore, the correct option is e. 11.86 percent.

Download pdf

3 0

3 years ago