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Sloan [31]
2 years ago
9

You managed a risky portfolio with an expected rate of return of 28% and a standard deviation of 78%. The T-bill rate is 5%. You

r client stipulates that the complete portfolio's standard deviation should be less than 12%. What proportion of your client's total investment should be invested in the risky portfolio
Business
1 answer:
Dennis_Churaev [7]2 years ago
6 0

Answer:

Portfolio standard deviation = Weight in Risky portfolio * Standard deviation of Risky portfolio

12% = Weight in risky Portfolio * 78%

Weight in risky Portfolio = 12% / 78%

Weight in risky Portfolio = 0.1538

Weight in risky Portfolio = 15.38%

Stock                    Weight     Return      Weighted Return

Risky portfolio      0.1538     28.00%              4.31%

Risk free Asset     0.8462    5.00%                <u>4.23%</u>

Portfolio Return                                              <u>8.54%</u>

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erica [24]

Answer:

10.92%

Explanation:

The formula and the computation of the estimated cost of equity capital is shown below:

Stock price = Next year dividend ÷ (cost of equity - expected dividend growth rate)

We assume the cost of equity be X

$34 = $3.10  ÷ (cost of equity - 1.8%)

$34 X - $34 × 1.8X = $3.10

After solving this,

The cost of equity would be 10.92%

3 0
3 years ago
Problem 9-18 Comprehensive Variance Analysis [LO9-4, LO9-5, LO9-6]
Thepotemich [5.8K]

Answer:

1 a. Materials price and quantity variances.

Material price variance = (Actual price - Standard price) * Actual Quantity purchased

= ($2.45 - $2) * 15,800

= $0.45 * 15,800

= $7110 (Unfavorable)

Materials Quantity variance = (Actual Quantity used - Standard Quantity allowed) * Standard price  

(10600 - 3000 * 3.6) * $2

= (10,600 -  10,800) * $2

= 200 * $2

= 400 (Favorable)

b. Labor rate and efficiency variances.

Labor rate variance = (Actual rate - standard rate) * Actual hours

= (6.30 - 6.6) * 2,100

= 0.3 * 2,100

= 630 (Favorable)

Labor Efficiency variance  = (Actual hours - standard hours allowed) *  Standard rate  

= (2100 - 3000 * 0.5) * 6.6

= (2,100 - 1,500) * 6.6

= 600 * 6.6

= 3960 (Unfavorable)

c. Variable overhead rate and efficiency variances

Variable overhead rate variance  = (Actual rate - Standard rate * Actual machine hours)

= 3000 - (2.10 * 1200)

= 3,000 - 2,520

= 480 Unfavorable

Variable overhead Efficiency variance = (Actual hours - standard hours allowed)* Standard rate

= (1200 - 3000 * 0.3) * 2.10    

= (1200 - 900) * 2.10

= 300 * 2.10

= 630 (Unfavorable)

2.    Variances                                            Amount

Material price variance                             7,110 U

Material quantity variance                         400 F

Labor rate variance                                    630 F

Labor efficiency variance                           3,960 U

Variable overhead rate variance               480 U

Variable overhead efficiency variance      <u>630 U</u>

Net variance                                                <u>11,150 U</u>

<u></u>

The net variance of all the variance of the month is 11,150 (Unfavorable)

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Alja [10]

Answer:

Store A = $9

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Finance Charges = $450 x (24% / 12)

Finance Charges = $9

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Finance Charges = $500 x (24% / 12)

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Answer:

B

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