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
Answer:
1. $3,067
2. B) $129,127.
Explanation:
a. The computation of amount deposit in transit is shown below:
The amount of deposit in Transit = Balance as per Cash Book as on 30th Sept - Cheque outstanding realized - Bank charges - Balance as per Bank Book
= $12,596 + $6740 - $16 - $16,253
= $3,067
Deposit in Transit inflates the general ledger initially till it is credited in the bank book.
b. The computation of balance should Cardinal's Cash account show
Cash Account should show a balance = Bank Statement Balance as on May 31 - Outstanding Cheque on May 31
= $180,974 - $51,847
= $129,127
As we can see that the cash account balance is less because there is an outstanding
Question Continuation
Determine the tax consequences of the redemption to Tammy and to Broadbill under the following independent circumstances.
Tammy and Jeremy are grandmother and grandson.
Answer:
See Explanation Below
Explanation:
Given.
Tammy number of shares = 300
Yvette number of shares = 400
Jeremy number of shares = 300
Each of the shareholders paid $50 per share.
Tammy's Ownership is calculated by; (300+300)/1000
= 600)1000
= 60% ---- before redemption
Tammy's Ownership = (150 + 300)/850
Tammy's ownership = 450/850
Tammy's Ownership = 52.94% ---- after redemption
The constructive ownership of Tammy is more than 80%, this means that the distribution is considered as income to Tammy
