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
kozerog [31]
3 years ago
9

Percival Hygiene has $10 million invested in long-term corporate bonds. This bond portfolio's expected annual rate of return is

9%, and the annual standard deviation is 10%. Amanda Reckonwith, Percival's financial adviser, recommends that Percival consider investing in an index fund that closely tracks the Standard & Poor's 500 Index. The index has an expected return of 14%, and its standard deviation is 16%. The Treasury bill yield is 6%. A. Suppose Percival puts all his money in a combination of the index fund and Treasury bills. Can he thereby improve his expected rate of return without changing the risk of his portfolio measured as the standard deviation?B. Could Percival do even better by investing equal amounts in the corporate bond portfolio and the index fund? The correlation between the bond portfolio and the index fund is _.1.
Business
1 answer:
BartSMP [9]3 years ago
4 0

Answer:

Explanation:

a)We find the portfolio weights first. For a two security portfolio

sP^2 = x_1^2s_1^2 + 2x_1x_2s_1s_2r_1_2 + x_2^2s_2^2

(0.10)^2 = 0 + 0 + x_2^2(0.16)^2

 x2 = 0.625 and x1 = 0.375

Then

rp = x1r1 + x2r2

rp = (0.375 ´ 0.06) + (0.625 ´ 0.14)

  = 0.11

 = 11.0%

Hence, he can improve the expected rate of return without any change in the risk of the portfolio.

b)

The expected return is:

rp = x1r1 + x2r2

rp = (0.5 *´ 0.09) + (0.5 ´* 0.14)

= 0.115 = 11.5%

sP^2 = x_1^2s_1^2 + 2x_1x_2s_1s_2r_1_2 + x_2^2s_2^2

sP2 = (0.5)^2(0.10)^2 + 2*(0.5)(0.5)(0.10)(0.16)(0.10) + (0.5)^2(0.16)^2

sP2 = 0.0097

sP = 0.985 = 9.85%

Hence, he can never perform better by investing equal amount in bond portfolio and index fund. The expected return increases to 11.5% and standard deviation decreases to 9.85%.

You might be interested in
​sheldon goes to the grocery store to buy a few items, and when he gets there he can remember only the last few things that he w
jenyasd209 [6]
The answer is recency effect. The recency effect happens when you only remember the things or events that just happened in a recent time.In this case, Sheldon is showing the recency effect because he only remembered the last part of the list that he was going to buy. If Sheldon had remembered the first part, then he is experiencing the Primary effect, which is the opposite of recency effect
5 0
3 years ago
Read 2 more answers
Following are the transactions of a new company called Pose-for-Pics.
liraira [26]

Answer:

                               Pose-for-Pics

                               Trial Balance

                For the month ended August 31

                                                    DEBIT      CREDIT

b. Cash                                       8,539

c. Offices                               2,280

d. Prepaid insurance               2,300

e. Photography equipment      51,600

f. Common stock                                      63,600

g. Photography fees earned                2,000

<u>h. Utilities expense                  881                   </u>

i. Totals                                     65,600    65,600

Explanation:

In trial balance, all accounts in general either real or nominal is posted here whether on debit or credit side. It shows the balances of debits and credits entries from the transaction of the general journal that the company have made for the period. There are 2 types of trial balance, the unadjusted trial balance and the adjusted trial balance.

8 0
4 years ago
Jim inherited a property that has not been maintained in years, the property needs new appliances, a roof, new siding, new elect
REY [17]

The lack of feasibility in doing repairs on the property inherited by Jim is called: incurable.

Incurable can be defined as any set of defects that is practically impossible for a property owner to fix, repair or cure, especially due to lack of maintenance and finance.

This ultimately implies that, incurable is a term that is associated with depreciation and it arises when the cost of repair of a property is far greater than the financial value of the property.

In conclusion, the lack of feasibility in doing repairs on the property inherited by Jim is called incurable.

Read more on incurable here: brainly.com/question/7986346

7 0
2 years ago
5 pose food risk or hazard
Brilliant_brown [7]

Answer:

brainliest plzzzzzz

Explanation:

1. Poultry

If not handled properly, raw and undercooked poultry (i.e. chicken and duck) have an extremely high contamination risk. The most common risks for these types of foods are salmonella and campylobacter bacteria. These bacteria are often present in the raw meat until cooking kills them off. This is why you should always make sure poultry is fully cooked before consumption and that anything the raw meat touches is properly washed and sanitized.

2. Eggs

Salmonella is also an issue with one of the biggest breakfast foods in the world. What is dangerous about the egg is that even a contaminated egg will not look, smell, or taste any different than an uncontaminated egg.

In order to avoid egg contamination, do not consume raw eggs or taste recipes that have raw eggs in them while they are being prepared. We recommend you purchase uncracked eggs and store them in your refrigerator.

 

3. Dairy Products

Dairy products like milk, cheese, and butter are also susceptible to contamination. Most of these contaminants stem from pesticides that are given to animals to “protect” their milk and meat. Also, you put yourself at risk to E. coli, salmonella, or listeria if you opt to consume raw milk. Always think twice about where your dairy is coming from and how you are storing it in a way that promotes food safety that lives up to the Texas Food Handler Certification standard.

 

4. Coffee

One surprising food on this list is coffee. Most coffee is cultivated in areas of the world where regulations on chemicals and pesticides are nonexistent. Some of the pesticides used in the growth of coffee are so dangerous that they are illegal to use on American farms.

In order to ensure that your coffee is not a victim of poor agricultural practices, seek out “Fair Trade” coffee for your establishment.

5. Seafood

It should be common sense that all seafoods must be stored properly from catch to preparation. There are many different illnesses that can come from contaminated seafood, depending on the seafood itself. Make sure to properly handle your seafoods and shellfish products to help prevent the spread of histamine or ciguatera poisoning.

5 0
3 years ago
Read 2 more answers
Juan Carlos originally hoped to purchase a home. However, because he could not earn enough money to ever afford one, he decided
Ivenika [448]

Answer:

Retreatism

Explanation:

Retreatism -

It is the concept or the methodology , which states that a person resigning the traditions of the society's idea of success and creating their own way of happiness and self satisfaction , is known as the method of Retreatism .

Same case is shown in the question , where Juan Carlos adapted the idea of Retreatism , in order to attain a happy life , by leaving his job and moving to the woods and enjoying the solitude .

5 0
3 years ago
Other questions:
  • PLEASE HELP....WILL GIVE BRAINLIST
    11·1 answer
  • Weyerhaeuser Incorporated has a balance sheet that lists $108 million in assets, $62 million in liabilities, and $46 million in
    6·1 answer
  • In 2003 __________, a public policy advisory board made up of representatives from numerous healthcare, trade, and professional
    9·1 answer
  • White Company budgeted for $200,000 of fixed overhead cost and volume of 40,000 units. During the year, the company produced and
    7·1 answer
  • What is the most difficult unit of the 1040EZ tax form to fill out? Why?
    13·1 answer
  • The Shoe Exchange issues 3,000 shares of its $1 par value common stock to provide funds for further expansion. The issue price i
    5·1 answer
  • Which of the following statements is CORRECT? Group of answer choices The New York Stock Exchange is an auction market with a ph
    11·1 answer
  • What is one thing you can do to help remember a new business contact? Write _______ on the back of his or her business card. A.
    15·2 answers
  • Suppose that the world price of resins is $100 per ton. Now suppose that the United States imposes a 10% tariff on imported resi
    11·1 answer
  • Whats a good way to start a business
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!