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kow [346]
3 years ago
7

Stock X has a standard deviation of return of 10%. Stock Y has a standard deviation of return of 20%. The correlation coefficien

t between stocks is 0.5. If you invest 60% of the funds in stock X and 40% in stock Y, what is the standard deviation of the portfolio?A. 10%B. 20%C. 1.48%D. 12.20%
Business
1 answer:
ValentinkaMS [17]3 years ago
8 0

Answer:

D. 12.20%

Explanation:

Stock X Weight = 0.60

Stock Y Weight = 0.40

sdX = 10%

sdY = 20%

Portfolio Variance = w2X*sd2(X) + w2X*sd2(Y) + 2*(wX)*(wY)*Cov(X, Y)

Where: wX and wY are portfolio weights, sd2(X) and sd2(Y) are variances and

Cov(X, Y) is the covariance

Correlation = 0.5

Cov(X, Y) = Correlation * sd(X) * sd(Y)

= 0.50 * 0.10 * 0.20

= 0.01

Portfolio Variance = 0.60^2 * 0.10^2 + 0.40^2 * 0.20^2 + 2 * 0.60 * 0.40 * 0.01

Portfolio Variance = 0.0036 + 0.0064 + 0.0048

Portfolio Variance = 0.0148

sd(P) = √Variance = 0.121655 = 12.20%

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Answer:

b. $25,000

Explanation:

For computing the pension liability amount, we need to do apply the formula which is shown below:

= Projected benefit obligation - Fair value of plan assets

= $103,000 - $78,000

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The net periodic pension cost and the employer's contribution is not relevant. So, these items are ignored and hence not included in the computation part.

The excess amount is shown as a pension liability.

7 0
4 years ago
What is the capacity of the machine in batches unfinished batch?
Oxana [17]

Complete Question:

You are considering the purchase of a new machine to help produce a new product line being introduced.  The machine is expected to have a setup time of 10 minutes per batch and a processing time of 2 minutes per part.  You plan to have batch sizes of 50 parts.  The plant operates 8 hours per day.

What is the capacity of the machine in batches per day?

Answer:

The capacity of the machine in batches = 4 batches per day.

Explanation:

a) Data and Calculations:

Set up time per batch = 10 minutes

Processing time per part = 2 minutes

Batch sizes = 50 parts

Plant operation = 8 hours per day

b) Capacity in batches per day:

Total batch time = 10 + 50 * 2 = 110 minutes

Total minutes of operation  per day = 8 * 60 = 480 minutes

Capacity in batches = 480/110 = 4.36 or approximately 4 batches

c) Each batch produces 50 parts with each part taking some 2 minutes and an additional batch setup time of 10 minutes, giving a total of 110 minutes per batch.  Since there are some 480 (8 * 60) minutes available per day, it means that the entity can only run about 4 batches (480/110) per day.  These 4 batches will consume a total of 440 minutes (110 x 4), leaving some 40 minutes as unutilized time.

4 0
3 years ago
Net Games Corporation hires Holley, a minor, to create new customized game software for certain clients. Holley signs a contract
Nuetrik [128]

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because he was not a big boss voting in his own version and was just about the same questions that he was doing in his first place to help him out

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3 years ago
Economics is mainly concerned with the study of
krek1111 [17]
Economics is mainly concerned with the study of scarcity. It is a branch of knowledge concern with the production , consumption and transfer of wealth.
6 0
4 years ago
The students in Mrs. Reed's English class are reading the same $760$-page novel. Three friends, Alice, Bob and Chandra, are in t
il63 [147K]

Answer:

456

Explanation:

Taking the number of pages Chandra reads as x; we formulate an equation:

In the equation below, 30 represents time taken by Chandra, 45 represents time taken by Bob and 760 is the number of pages in the novel.

Solving for x:

30x = 45(760-x) ;

30x = 34,200 - 45x

30x + 45x = 34,200

75x = 34,200

x = 34,200/ 75

x= 456

Therefore Chandra will need to read up to the 456 page.

4 0
3 years ago
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