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viktelen [127]
3 years ago
10

study Assume that you are going to invest $120,000 in a two asset portfolio. You will invest $80,000 in the fully diversified ma

rket portfolio and the remainder of your funds will be invested in the riskless security. Assume the market risk premium is 8% and the riskless return is 4%. Compute the expected return on this portfolio.
Business
1 answer:
Ratling [72]3 years ago
5 0

Answer:

9.33%

Explanation:

The expected return of  two asset portfolio is the weighted average of individual assets' expected to return as computed thus:

Portfolio expected return=(weight of market portfolio*expected return of market portfolio)+(weight of riskless security*expected return of riskless security)

weight of market portfolio=amount invested in market portfolio/total invested amount

weight of market portfolio=$80,000/$120,000=66.67%

expected return of market portfolio=market risk premium+riskless return

expected return of market portfolio=8%+4%=12%

weight of riskless security=1-66.67%=33.33%(since total investment which is 100% is 1)

expected return of riskless security=4%

Portfolio expected return=(66.67%*12%)+(33.33%*4%)

Portfolio expected return=\=9.33%

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Sustainable development refers to A. placing restraints on a company's growth until all ancillary support services are in place
Semmy [17]

Answer:

The correct answer is letter "C": conducting business in a way that protects the natural environment while making economic progress.

Explanation:

Sustainable development is the capacity an institution has to satisfy individuals' needs without damaging the environment neither harming the atmosphere. To reach this stage there must be an equilibrium between the <em>economy, society, </em>and <em>the environment.</em> Sustainable development is difficult to be obtained with high poverty rates, habitats destruction, or indiscriminately resources exploitation.

4 0
3 years ago
jphone, inc., has an equity multiplier of 1.41, total asset turnover of 1.7, and a profit margin of 8 percent.
lukranit [14]

ROE = 15.40 is the right answer.

ROE = (profit margin x asset turnover x equity multiplier)

ROE = (7 x 1.63 x 1.35)

ROE = 15.40

<h3>What is Return on Equity?</h3>

The efficiency of a company's management team in managing the capital that shareholders have invested in it can be gauged by investors using the ratio known as return on equity (ROE). In other words, return on equity evaluates how profitable a company is in comparison to the equity held by stockholders. A company's management is more effective at generating revenue and growth from its equity financing the higher the ROE.

Using ROE, one may assess a business's position in relation to the market and its rivals.

The method is especially useful when comparing businesses in the same industry since it can be used to evaluate almost any company with a focus more on tangible than intangible assets and to identify which businesses are more financially efficient.

Shareholder equity divided by net income is referred to as the return on equity (ROE).

Before common-stock dividends are paid, the bottom line profit shown on an organization's income statement is known as net income. An alternative to net income is free cash flow (FCF), which is another measure of profitability.

Thus, ROE is a financial measuring tool for any business.

For more information on ROE, refer to the given link:

brainly.com/question/27821130

#SPJ4

8 0
1 year ago
A firm may opt to pay millions of dollars for celebrity endorsements in order to:_____
Oxana [17]

A firm may opt to pay millions of dollars for celebrity endorsements in order to signal to consumers that the advertised product is appealing and likely to be popular.

A consumer is defined as an individual or business that consumes or uses goods or services. A customer is a buyer in the economy who buys goods and services and can exist as a consumer or as a sole customer.

Consumers are sometimes contrasted with producers. For example, a company that manufactures toothpaste is a producer. And if you buy this toothpaste, you are a consumer. However, be aware that people often produce and consume the same item.

It is the producers and consumers who buy and sell. Producers create or produce goods and provide services, and consumers buy those goods and services with money. Most people are both producers and consumers.

Learn more about  consumers here: brainly.com/question/380037

#SPJ4

5 0
2 years ago
The price that a company charged for a computer accessory is given by the equation mc013-1. Jpg where x is the number of accesso
bezimeni [28]

Using a trial and error method, the other number of accessories the company produced which yields approximately the same profit is <em>A. 1.45 million.</em>

Data and Calculations:

Price for the computer accessory =  100 - 10x^2)

Manufacturing cost = $10

Current production = 2 million

Profit generated based on 2 million accessories = $100 million dollars

= (100 - 10x^2)x - 10x

Where:

y = profit

x = number of accessories (in millions)

Using a trial and error method, replace x with 1.45 million and work out the answer.  This option generates a profit of $100 million like 2 million accessories.

Question Completion:

The price that a company charged for a computer accessory is given by the equation 100-10x^2 where x is the number of accessories that are produced, in millions. It costs the company $10 to make each accessory. The company currently produces 2 million accessories and makes a profit of 100 million dollars. What other number of accessories produced yields approximately the same profit?

Answer Options:

A. 1.45 million

B. 3.45 million

C. 40 million

D. 48 million

Thus, the other number of accessories the company produced which yields approximately the same profit is <em>A. 1.45 million.</em>

Learn more about using the profit function to determine the production or sales quantity here: brainly.com/question/1456472 and brainly.com/question/25395113

3 0
3 years ago
Sunshield is a company that manufactures bottles of sunscreen. Below is basic information related to Sunshield's 2019 operations
GenaCL600 [577]

Answer:

Complete the following statements: <u>THEORETICAL CAPACITY</u> would result in the largest production volume variance; <u>NONE OF THE CAPACITY CHOICES</u> would result in a favorable production volume variance.

a. theoretical capacity; none of the capacity choices

Explanation:

production volume variance = (actual unit quantity manufactured - budgeted unit quantity manufactured) x budgeted cost per unit

(actual production - theoretical capacity) x budgeted cost per unit = (250,000 - 275,000) x budgeted cost = 25,000 x budgeted cost

None of the capacity choices would result in a favorable variance because actual production was lower than all of them.

actual production 250,000 < theoretical 275,000

actual production 250,000 < practical 265,000

actual production 250,000 < normal 260,000

6 0
3 years ago
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