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Mashcka [7]
3 years ago
10

You are considering two alternative two-year investments: You can invest in a risky asset with a positive risk premium and retur

ns in each of the two years that will be identically distributed and uncorrelated, or you can invest in the risky asset for only one year and then invest the proceeds in a risk-free asset. Which of the following statements about the first investment alternative (compared with the second) are true?a. Its 2-year risk premium is the same as the second alternative.b. The standard deviation of its 2-year return is the same.c. Its annualized standard deviation is lower.d. Its Sharpe ratio is higher.e. It is relatively more attractive to investors who have lower degrees of risk aversion.
Business
1 answer:
den301095 [7]3 years ago
4 0

Answer:

The correct answers from the options are options C and E

Explanation:

Here, the first investment alternative depicts an investment in a risky asset with a positive risk premium and returns (dividends) for each of the two years that will be evenly distributed. Therefore, the following statements are true about the first investment alternative compared to the second;

i)  Its annualized standard deviation is lower, and

ii) It is relatively more attractive to investors who have lower degrees of risk aversion.

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What is a way to protect your social security number and other sensitive information from identity theft
fgiga [73]
Limit how may credit cards you carry.

If you carry so many, you would be most likely to loose some of them easily.

Hope this helps!
7 0
3 years ago
Read 2 more answers
If Kelly deposits $10,000 into an account that pays 8 percent interest, compounded annually, and she makes no further deposits o
avanturin [10]

Answer:

C) $14,693

Explanation:

Compound interest considers the return on investment (or interest) to be reinvested and provides return as well. Future value of principal value considering compound interest can be determined by below formula:

FV = P(1+\frac{r}{n})^{nt}

where

FV = ? is the future value

P = \$10000 is the principal amount invested

r = 8\% is the rate of interest

n= 1 is the number of times interest is compounded within one time period

t = 5 years is the number of time periods

FV = P(1+\frac{r}{n})^{nt}

FV = 10000*(1+\frac{0.08}{1})^{1*5}

FV = \$14693

7 0
4 years ago
Which of the following would affect an employee's net pay?
sdas [7]

Answer:

b. Claiming a different number of dependents and thereby reducing their income tax

Explanation:

Net pay is the money that an employee receives after all deductions from their gross pay. Net pay is the amount that gets into the employee's salary account. The net pay is affected by an increase or decrease in salary or an increase or decrease in deductions.

Claiming a different number of dependents reduces the amount of income tax withheld. The effect is a reduction in the total deductions. If deductions are reduced, the employee will have higher net pay. The other options do not increase or decrease gross pay or deductions.

6 0
3 years ago
Wilbert's Clothing Stores just paid a $1.25 annual dividend. The company has a policy whereby the dividend increases by 2% annua
Anon25 [30]

Answer:

option (C) $1,353

Explanation:

Annual dividend paid = $1.25

Increase in dividend annually, g = 2%

Number of stocks to be purchased = 100

Rate of return, r = 12%

Price at the end of Year 3 = \textup{Annual dividend}\times\frac{\textup{(1+g)}^n}{\textup{r-g}}

here, n = 4 (after 3 years)

Price at the end of Year 3 = \textup{1.25}\times\frac{\textup{(1+0.02)}^4}{\textup{0.12-0.02}}

or

Price at the end of Year 3 = \textup{1.25}\times\frac{\textup{1.0824}}{\textup{0.1}}

or

Price at the end of Year 3 = $13.53

Therefore,

Expected amount to be paid for 100 shares = $13.53 × 100 = $1,353

Hence,

the correct answer is option (C) $1,353

8 0
3 years ago
People who are unemployed because wages are, for some reason, set above the level that brings labor supply and demand into equil
denpristay [2]

Answer:

A. Structurally unemployed.

Explanation:

The natural rate of unemployment includes both unemployment created by job search and unemployment created by above equilibrium wages. When a union raises the wage above the equilibrium level it raises the quantity of labor supplied and reduces the quantity of labor demanded, resulting in unemployment. We know, structural unemployement are caused by mismatch between demand and supply of required skill or wages in the labor market, that´s why it is also called involuntary unemployment.

5 0
3 years ago
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