1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Olin [163]
2 years ago
9

You would like to combine a risky stock with a beta of 1.5 with U.S. Treasury bills in such a way that the risk level of the por

tfolio is equivalent to the risk level of the overall market. What percentage of the portfolio should be invested in Treasury bills? (Formula: Portfolio beta = w1 * beta 1 + w2 *beta 2; w1+w2 = 1) Round your answer to the integer. Note that the answer needs to be in PERCENTAGE. Weight in stock = Blank 1. Fill in the blank, read surrounding text. 67 % Weight in T-Bill = Blank 2. Fill in the blank, read surrounding text. 33 %
Business
1 answer:
Deffense [45]2 years ago
5 0

Answer:

33.33%

Explanation:

Let weight of T-bill be x, therefore weight of stock will be 1-x

Portfolio = Weight of stock*Beta of stock + Weight of T-bills*Beta of T-bills

1 = (1-x)*1.5 + x*0

1 = 1.5 - 1.5x

x = 0.5/1.5

x = 0.3333

x = 33.33%

Therefore, the percentage of the portfolio invested in treasury bills is 33.33%.

You might be interested in
Suppose two types of consumers buy suits. Consumers of type A will pay $100 for a coat and $50 for pants. Consumers of type B wi
n200080 [17]

Answer:

The firm will not sell any bundle, the amount of bundle to be sold will be zero.

Explanation

Solution

Since firm sells at $25 each for coats and pants, then If consumer wants to purchase both Pant and Coat, the customer will have to pay 25 + 25 = $50.

Also, If consumer purchase Pant and Coat as a Bundle then, he will pay 150. From the question stated we can conclude  that  their is a form of interest to pay for Pant and Coat for Both consumers are higher than 25.

However, they will have to pay an amount less for 1 coat and 1 pant if they buy this in a separate way instead of a  Bundle.

We can say, that type of consumers (both) will not buy the pants and coat as a bundle, but will want to buy them separately.

Therefore, any bundle will not be sold by firm. the amount of Bundle sold will be known as a zero Bundle

5 0
3 years ago
False Value Hardware began 2016 with a credit balance of $32,000 in the allowance for sales returns account. Sales and cash coll
gayaneshka [121]

Answer:

$607,000

Explanation:

False Value Hardware began 2016 with a credit balance of $32,000 in the allowance for sales returns account.

Sales and cash collections from customers during the year were $650,000 and $610,000, respectively.

False Value estimates that 6% of all sales will be returned.

During 2016, customers returned merchandise for credit of $28,000 to their accounts.

False Value's 2016 income statement would report net sales of:  

The closing balance in the allowance for sales returns account will be: 32,000 opening balance + 6% 0f 650,000 - sales returns within the year of 28,000 = $43,000

Hence Net Sales will be 650,000 - 43,000 = $607,000

5 0
3 years ago
Twenty-six years ago, several small vineyard owners in california joined voluntarily to market their grapes and wine in an attem
pentagon [3]
<span>Diversification. The wine got them started and they progressed into the very items that brought them income. They are trying to control the market and also expand into financial and tech so you can consider them a business development business.</span>
8 0
3 years ago
Carr Corporation retires its $100,000 face value bonds at 105 on January 1, following the payment of interest. The carrying valu
Brrunno [24]

Answer: A. debit of $3,745 to Premium on Bonds Payable.

Explanation:

The carrying value of the bonds at redemption date is $103,745.

The bonds retired however, had a face value of $100,000.

The company therefore paid a premium on these bonds which is:

= 103,745 - 100,000

= $3,745

This amount will be debited to the Premium on Bonds Payable account.

4 0
2 years ago
Another bank is also offering favorable terms, so Rahul decides to take a loan of $22,000 from this bank. He signs the loan cont
Wittaler [7]

Answer:

$22,897.74

Explanation:

Given:

Loan amount (P) = $22,000

rate (R) = 8% = 8/100=0.08/365 = 0.000219178082

Number of days(n) = 6 month = (6 x 365)/12 = 182.5

Total Amount = ?

A = P(1+ I)^n\\A = 22,000(1+0.000219178082)^{182.5}\\=22,000(1.000219178082)^{182.5}\\=22,000(1.04080658)\\= 22,897.744

Therefore, he have to pay $22,897.74 to the bank.

5 0
3 years ago
Other questions:
  • Beginning in the 30's, the average female's rmr declines by approximately ________________ per decade and the average males by _
    5·1 answer
  • A delivery van costing $37,000 is expected to have a $2,900 salvage value at the end of its useful life of five years. Assume th
    14·1 answer
  • Parenthetical citations are _____.
    6·1 answer
  • Suppose the Andrews company expands to other markets with good designs, high awareness, and easy accountability, what strategy w
    14·1 answer
  • Interest rates on mortgages are lower because the home is _____.
    6·1 answer
  • 43. What is the difference between formal and informal structure?
    7·1 answer
  • When Pete Mills went to withdraw $10,100 from the NFA Mutual fund, he was informed that the fund would charge 6 percent of the a
    7·1 answer
  • Waterloo, Ltd. manufactures a component used in aircraft navigation systems. Demand has been strong and the executive staff at W
    7·1 answer
  • In a sweezy oligopoly, the profit-maximizing level of output occurs where:_____.
    12·1 answer
  • If ABC corporation paid a dividend of $6 per share last year. The stock currently sells for $80 per share. You estimate that the
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!