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Mars2501 [29]
3 years ago
11

You want to construct a portfolio containing equal amounts of U.S. Treasury bills and two stocks. If the beta of the first stock

is 1.23 and the beta of the portfolio is 1.0, what does the beta of the second stock have to be
Business
1 answer:
Tasya [4]3 years ago
8 0

Answer:

the beta of the second stock is 1.77

Explanation:

The beta of the second stock is shown below;

Investment in each = (1 ÷ 3)

Now as we know that

Portfolio beta = Respective investments × Respective weights

1 = (1 ÷ 3 × 1.23) + (1 ÷ 3 × beta of the second stock) + (1 ÷ 3 × 0)

We assume the Beta of risk-free assets would be zero

1 = 0.41 + (1 ÷ 3 × beta of the second stock)

The beta of the second stock is

= (1 - 0.41) × 3

= 1.77

Hence, the beta of the second stock is 1.77

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When Jasmine interviewed for a position as a computer programmer, she was asked to take a test on a particular programming langu
blagie [28]

Answer:

Performance

Explanation:

She is asked to take a test to analyse here capability and understanding. The test she took is called 'Performance testing' it is a way toward deciding the swiftness, responsiveness and knowledge of a particular set of skill. It helps an organisation or a firm to pick the right candidate for the job. The organisations usually choose a candidate by analysing their  performance test.

5 0
3 years ago
At year​ end, Tangshan China Company balance sheet showed total assets of​ $60 million, total liabilities​ (including preferred​
Studentka2010 [4]

Answer:

Earnings per share

= <u>Net income - Preferred dividend </u>

  No of common stocks outstanding

= <u>$1,500,000 - 0</u>

   1,000,000 shares

= $1.50 per share

P/E ratio = <u>Market price per share</u>

                 Earnings per share

15   = <u>Market price per share</u>

              $1.50

Market price per share = 15 x $1.50

                                      = $22.50

Explanation:

In this question, there is need to calculate earnings per share by dividing net income by number of common stocks outstanding. Thereafter, we will apply P/E ratio formula, where P/E ratio and earnings per share are known. We will make market price per share the subject of the formula.

7 0
2 years ago
Division A makes a part with the following characteristics: Production capacity in units 34,000 units Selling price to outside c
azamat

Answer:

Division A

If Division A agrees to sell the parts to Division B at $18 per unit, the company as a whole will be:

worse off by $30,000 each period.

Explanation:

a) Data and Calculations:

Production capacity of Division A = 34,000

Selling price per unit to outside customers = $21

Variable cost per unit = $13

Total fixed costs = $105,800

Order from Division B = 10,000

Price that Division B purchases from outside supplier = $18

Selling to Division B instead of selling to outside customers will result in a loss of $3 ($21 - $18) per unit

The total loss = $30,000 ($3 * 10,000)

7 0
2 years ago
A Whopper combo meal costs $3.00 and gives you an additional 15 units of utility; a meal at the Embassy Suites costs $29.00 and
Olenka [21]

Answer:

be indifferent between the two meals

Explanation:

Marginal utility is the additional satisfaction received from consuming an additional unit of a good or service. Marginal utility is the additional utility derived from consuming one more unit of a good. the consumption decision is to consume more units of a good that gives the higher utility per good.

Marginal utility per good = marginal utility / price of the good

Whopper combo meal = 15 / 3 = 5

a meal at the Embassy Suites = 145 / 29 = 5

both meals have the same marginal utility of 5. She would be indifferent between consuming the two meals

8 0
3 years ago
You have the following information regarding a bond that pays semi-annual coupon payments: Time to maturity is 12 years Coupon R
IrinaK [193]

Answer: 2%

Explanation:

As the coupon payments are semi-annual, you need to convert the other measures to semi-annual measures as well.

Coupon rate = 6%/2 = 3% per semi annum

Coupon payment = 3% * 1,000 which is par value = $30

Time to maturity = 12 * 2 = 24 semi annual periods

Price is still the same = $1,189.14

You can use an Excel worksheet to solve for the Yield:

Number of periods = 24

Payment = $30

PV = 1,189.14

FV is par value of $1,000

Periodic rate is 0.019999

= 2%

7 0
2 years ago
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