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Rashid [163]
3 years ago
11

Assume that you manage a risky portfolio with an expected rate of return of 17% and a standard deviation of 27%. The T-bill rate

is 7%.
You estimate that a passive portfolio invested to mimic the S&P 500 stock index yields an expected rate of return of 13% with a standard deviation of 25%.


What is the slope of the CML? (Round your answer to 2 decimal places.)
Business
1 answer:
Mice21 [21]3 years ago
8 0

Answer:

The slope of the CML = (13% - 7%)/25% = 0.24

Explanation:

Given that:

expected rate of return of 17%

standard deviation of 27%.

The T-bill rate is 7%.

You estimate that a passive portfolio invested to mimic the S&P 500 stock index yields an expected rate of return of 13% with a standard deviation of 25%.

The slope of the CML is

Slope of the CML = (Expected return of Market - Risk free return)/Standard deviation of market

The slope of the CML = (13% - 7%)/25% = 0.24

= (0.13 - 0.07) /0.25

= 0.24

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During the 1990s, one of the dominant firms in the U.S. cigarette industry would raise prices once or twice a year by about 50 c
Veronika [31]

Answer:

This is an example of price leadership.

Explanation:

Price leadership is a type of practice where a firm, most likely a dominant one, sets the price and other firms follow it. It is commonly seen in an oligopoly market.  

In an oligopoly market, there are a few firms, these firms are interdependent. A price change by one firm affects its rivals.

Price leadership is of different types.

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So when a dominant firm changes its price, the followers have to follow it if we they want to retain their market share.

8 0
3 years ago
Green Garden Company purchased a tractor at a cost of $240,000. The tractor has an estimated residual value of $40,000 and an es
Nata [24]

Answer:

There is a loss on disposal of $10000 and option C is the correct answer.

Explanation:

The units of production method charges depreciation based on the activity level that the asset is used for during a period

The depreciation rate under this method is,

Depreciation per hour = (240000 - 40000) / 10000  =  $20 per hour

The depreciation for the Year 2015 and 2016 under the units of production method is,

2015 = 20 * 2400 = $48000

2016 = 20 * 2100 = $42000

The accumulated depreciation at the end of 2016 is = 48000 + 42000 = $90000

The carrying value at the end of 2016 is = 240000 - 90000 = $150000

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7 0
3 years ago
The major feature of zero-based budgeting is that it?
luda_lava [24]

The correct option is (B); Questions each activity and determines whether it should be maintained as it is, reduced, or eliminated.

<h3>What is zero-based budgeting (ZBB)?</h3>

Zero-based budgeting (ZBB) is a budgeting strategy that entails creating a fresh budget from scratch each time, or from "zero," as opposed to beginning with the budget from the prior month and making adjustments as necessary.

Key features of zero-based budgeting are-

  • The zero-based budgeting (ZBB) methodology helps companies match their spending to their strategic objectives.
  • According to this methodology, firms must create their yearly budget from scratch each year in order to ensure that all of its components are affordable, pertinent, and capable of generating increased savings.
  • With zero-based budgeting, each budgeting cycle is started at zero.
  • This strategy requires explanation of all expenses, not just new ones.
  • The quickest path to achieving your financial objectives is still with a thorough spending strategy.

To know more about the zero-based budget, here

brainly.com/question/26195666

#SPJ4

The correct question is-

The major feature of zero-based budgeting (ZBB) is that it

A. Takes the previous year’s budgets and adjusts them for inflation.

B. Questions each activity and determines whether it should be maintained as it is, reduced, or eliminated.

C. Assumes all activities are legitimate and worthy of receiving budget increases to cover any increased costs.

D. Focuses on planned capital outlays for property, plant, and equipment.

4 0
2 years ago
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