D to increase the money supply and lower the inflation rate
Answer:
a) Portfolio ABC's expected return is 10.66667%.
Explanation:
Some information is missing:
Stock Expected Standard Beta
return deviation
A 10% 20% 1.0
B 10% 10% 1.0
C 12% 12% 1.4
The expected return or portfolio AB = (1/2 x 10%) + (1/2 x 10%) = 10% (it is the same as the required rate for stock A or B)
The expected return or portfolio ABC = (weight of stock A x expected return of stock A) + (weight of stock B x expected return of stock B) + (weight of stock C x expected return of stock C) = (1/3 x 10%) + (1/3 x 10%) + (1/3 x 12%) = 3.333% + 3.333% + 4% = 10.667% <u>THIS IS CORRECT</u>
Options B, C, D and E are wrong.
Answer:
i=4.84%
Explanation:
the key to answer this question, is to remember the model of return for a perpeuity dividend calculation:
where value is the current stock price, i is the dividend yield and k is the growth rate, so applying to this particular case we have
k=3.4/91
k=3.74%
and solving i for the previous formula:
<span>Each scenario refers to some label. The labels are placed with a different order. We need to arrange them by checking the possibilities. Labels most probably matches with one scenario each or it can be many. If labels are less in numbers than the scenarios then it can be matched with multiple scenarios.</span>
Answer:
Therefore Expected Value of the information = $65,000+$62,000 - $10,000 = $117,000
Explanation:
If the market research survey is available for $10,000.
Using a decision tree analysis, it has been found that the expected monetary value with the survey is $65,000. The expected monetary value with no survey is $62,000.
<u>Then the expected value of the information from this sample is the expected value of each outcome and deducting the costs associated with the decision</u>
Therefore Expected Value of the information = $65,000+$62,000 - $10,000 = $117,000
