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KatRina [158]
3 years ago
15

What is the expected return on a portfolio comprised of $9,750 of Stock X and $4,520 of Stock Y if the economy enjoys a boom per

iod? State of Econom Probability of State of Economy Rate of Return if State Occurs Stock X Stock Y Boom .25 .108 .156Normal .65 .087 . 097Recession .10 .024 .067A. 11.93 percent B. 11.57 percent C. 12.78 percent D. 12.32 percent
Business
1 answer:
snow_lady [41]3 years ago
4 0

Answer:

D. 12.32 percent

Explanation:

Calculation for the expected return on a portfolio

Expected return on a portfolio =[$9,750/($9,750 + 4,520)](.108) + [$4,520/($9,750 + 4,520)](.156)

Expected return on a portfolio =[$9,750/$14,270)](.108) + [$4,520/$14,270](.156)

Expected return on a portfolio =0.07379+0.04941

Expected return on a portfolio = .1232*100

Expected return on a portfolio =12.32%

Therefore the expected return on a portfolio will be 12.32%

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Buying used cars is a good way to avoid depreciation. <br> a. True <br> b. False
IceJOKER [234]
Your answer should be true
4 0
3 years ago
Consider a risky portfolio. The end-of-year cash flow derived from the portfolio will be either $40,000 or $135,000, with equal
pogonyaev

Answer:

a. $76,754

.38

b. 14%

c. $73,529

Explanation:

a. The computation of portfolio is given below:-

Risk Premium

= Required return - Risk free rate

= 10% + 4%

= 14%

Expected value of the payoff

= $40,000 × 1 ÷ 2 + $135,000 × 1 ÷ 2

= $87,500

Value of portfolio = $87,500 ÷ (1 + 14%)

= $76,754.39

b. The calculation of expected rate of return on the portfolio is shown below:-

= ($87,500 - $76,754.39) ÷ $76,754.39

= 14%

c. The calculation of risk premium is shown below:-

Risk premium = Required return - Risk free rate

Required return = 15%+4% = 19%

Expected rate of the payoff

= $40,000 × 1 ÷ 2 + $135,000 × 1 ÷ 2

=$87500

Value of portfolio

= $87,500 ÷ (1 + 19%)

= $73,529

4 0
3 years ago
A company that has no money to spend on marketing would probably be best advised to try their luck, at least initially, with wha
marysya [2.9K]
C. sales promotion would be the answer
6 0
3 years ago
It takes Anne 3 hours to make a pie and 4 hours to make a shirt. It takes Mary 2 hours to make a pie and 5 hours to make a shirt
mina [271]

Answer:

False

Explanation:

An economic agent should specialise in the production of the good for which it has a comparative advantage in its production.

An economic agent has a comparative advantage in production if it produces at a lower opportunity cost when compared with other economic agents.

Anne's opportunity cost in pie production = 4/3=1.33

Anne's opportunity cost in shirt production = 3/4 = 0.75

Mary's opportunity cost in pie production = 5/2 = 2.5

Mary's opportunity cost in shirt production = 2/5 = 0.4

Anne has a comparative advantage in the production of pies and Mary has a comparative advantage in the production of shirts.

Anne should specialise in pie production and Mary should specialise in shirt production.

I hope my answer helps you

5 0
3 years ago
The accounting process begins with: Multiple Choice Analysis of business transactions and source documents. Preparing financial
Kitty [74]

Answer:

The accounting process begins with Analysis of business transactions and source documents

Explanation:

The Accounting process begins by<em> identifying the transactions and events</em> that occurred in the business.

After identification, the events and transactions have to be<em> recorded in appropriate Account</em> using the <em>proper books of entry</em>.

A list of Balances known as the <em>Trial Balance</em> is then computed when the Accounts are closed.

The Trial Balance is then used <em>to prepare financial statements</em>.

Financial Statements are then <em>Analysed</em> to assist various stakeholders and users of financial statements to <em>make decisions</em>.

6 0
2 years ago
Read 2 more answers
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