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Mnenie [13.5K]
3 years ago
5

Question 10 (2 points)

Mathematics
1 answer:
igomit [66]3 years ago
7 0

Answer:

a = 2

Step-by-step explanation:

To find the missing length we can use the Pythagorean theorem. Also, because it's a right triangle it makes it the perfect candidate!

The Pythagorean Theorem states:

a^2 + b^2 = c^2

Next, we substitute the letters with our given numbers (keep in mind that c is the hypotenuse which is the side facing the right angle)

a^2 + 2.1^2 = 2.9^2

Finally, we solve our equation (hint: use the calculator if needed)

a^2 = 4 (your answer is not final yet. You have to take the square root of both numbers)

a = 2 (Now that's the final answer!)

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What is the variance of a portfolio invested 21 percent each in a and b and 58 percent in c?
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Given the following information:

\begin{tabular}&#10;{|p{1.5cm}|p{1.5cm}|p{1.2cm}|p{1.2cm}|p{1.2cm}|}&#10;\multicolumn{1}{|p{1.5cm}|}{State of economy}\multicolumn{1}{|p{2.6cm}|}{Probability of State of economy}\multicolumn{3}{|p{4.8cm}|}{Rate of Return if State Occurs}\\[1ex] &#10;\multicolumn{1}{|p{1.5cm}|}{}\multicolumn{1}{|p{2.6cm}|}{}\multicolumn{1}{|c|}{Stock A}&StockB&Stock C\\[2ex]&#10;\multicolumn{1}{|p{1.5cm}|}{Boom}\multicolumn{1}{|p{2.6cm}|}{0.66}\multicolumn{1}{|p{1.27cm}|}{0.09}&0.03&0.34\\&#10;\end{tabular}
\begin{tabular}&#10;{|p{1.5cm}|p{1.5cm}|p{1.2cm}|p{1.2cm}|p{1.2cm}|}&#10;\multicolumn{1}{|p{1.5cm}|}{Bust}\multicolumn{1}{|p{2.6cm}|}{0.34}\multicolumn{1}{|p{1.27cm}|}{0.23}&0.29&-0.14\\&#10;\end{tabular}

Part A:

The expected return on an equally weighted portfolio of these three stocks is given by:

0.66[0.33 (0.09) + 0.33 (0.03) + 0.33(0.34)] \\ +0.34[0.33 (0.23) + 0.33(0.29) +0.33(-0.14)] \\  \\ =0.66(0.0297 + 0.0099 + 0.1122)+0.34(0.0759+0.0957-0.0462) \\  \\ =0.66(0.1518)+0.34(0.1254)=0.1002+0.0426=0.1428=\bold{14.28\%}



Part B:

Value of a portfolio invested 21 percent each in A and B and 58 percent in C is given by

For boom: 0.21(0.09) + 0.21(0.03) + 0.58(0.34) = 0.0189 + 0.0063 + 0.1972 = 0.2224 or 22.24%.

For bust: = 0.21(0.23) + 0.21(0.29) + 0.58(-0.14) = 0.0483 + 0.0609 - 0.0812 = 0.028 or 2.8%

Expected return = 0.66(0.2224) + 0.34(0.028) = 0.1468 + 0.00952 = 0.1563 or 15.63%

The variance is given by

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