Answer:
Yes, you can be confident that the portfolio will not lose more than 30% of its value next year
Explanation:
In this question , the average return of portfolio is 12.5% and the standard deviation is 19.5%. It is estimated that there will be 30% loss next year. The confidence interval is 95%.
Range = Average return ± 2 x Standard deviation Low aid = 12.5% - (2 x19.5%) =12.5% -39% = -26.5%
High end = 12.5% +(2 x19.5%) =12.5%+39% = 51.5%
Thus, the low end is
26.5%
The range of return at 95% confidence interval is -26.5% to 51.5%
Answer:
You should pay $84.42 today for the bond.
Explanation:
bond price = value of bond/[(1 + interest rate)^number of years]
= $100/[(1 + 1.9%)^9]
= $100/(1.185)
= $84.42
Therefore, You should pay $84.42 today for the bond.
Answer:
112 customers per day
Explanation:
For computing the needed capacity requirement, first we have to find out the new utilization rate which is shown below:
Capacity cushion = 100% - average utilization rate
25% = 100% - average utilization rate
So, the average utilization rate is 75%
Now the needed capacity requirement is
Utilization rate = Average output rate ÷ Maximum capacity × 100
75% = 84 ÷ Maximum capacity × 100
So, the maximum capacity is 112 customers per day
We simply applied the above formula to determine the needed capacity requirement
