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kifflom [539]
2 years ago
14

You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1.08 and the total

portfolio is equally as risky as the market, what must the beta be for the other stock in your portfolio?
Business
1 answer:
Luden [163]2 years ago
4 0

Answer: 0.92

Explanation:

Beta is a measure of riskiness and Market beta is always 1.

The total portfolio therefore has a beta of 1.

Portfolio Beta is weighted average of the betas of the composite stocks.

The stocks are equally invested in so their weights are 0.5.

Assume the beta needed is x.

(0.5 * 1.08) + (0.5 * x) = 1

0.54 + 0.5x = 1

0.5x = 1 - 0.54

x = 0.46/0.5

= 0.92

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Answer:

1. Dr Raw materials inventory $175,000

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3. Dr Factory overhead $7,000

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Explanation:

Preparation of journal entries transactions for the month of May.

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4 0
3 years ago
Time preference is: a. the purchase of new capital goods. b. a sophisticated IOU that documents who owes how much and when payme
kirill [66]

Answer:

D. the desire to have goods and services sooner rather than later (all other things being equal).

Explanation:

The time preference talks about the placing relative value on goods received at an earlier date compared with receiving that particular goods at a later date. It is the assumption that people prefer a given goods or services be delivered sooner rather than later all things being equal. It occurs when a person focus on having a good sooner rather than later.

7 0
3 years ago
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In margin buying you borrow shares to sell now and buy back the shares later and return those. True or False
kotegsom [21]

Answer:

False

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7 0
3 years ago
Economists say that individuals make decisions at the margin. What does its menas?
leva [86]

Answer:

When Economists say that humans make decisions at the margin they mean that decisions are made on the basis of the cost and benefit of getting an additional unit of a good/ service.

Marginal benefit refers to the additional utility that we will derive from consuming one extra unit of a good or service and factors in heavily into our decision making. We usually accept a decision if the Marginal benefit is higher or equal to the Marginal cost ( cost of the additional unit) of the good/service.

If the Marginal Cost is instead higher, the decision would most probably be cancelled.

4 0
3 years ago
It usually takes less time to buy a six-pack of Pepsi, a loaf of bread, and a bag of potato chips at a small convenience store (
dybincka [34]

Answer:

The correct answer is the option A: a person with a high opportunity cost of time.

Explanation:

To begin with, the opportunity cost of something is what the person sacrificies in order to be doing that thing. Therefore that when we talk about the opportunity cost of time it refers to what the person sacrificies in order to do something with that time. If the person has a high opportunity cost of time then the sacrificies that he made with that time will be higher than other person that has a low opportunity cost of time, meaning that the time spent by that person is less important than to the one that has a lot of time to spare.  

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