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anzhelika [568]
3 years ago
8

You invest $1,000 in a complete portfolio. The complete portfolio is composed of a risky asset with an expected rate of return o

f 16% and a standard deviation of 20% and a Treasury bill with a rate of return of 6%. ________ of your complete portfolio should be invested in the risky portfolio if you want your complete portfolio to have a standard deviation of 9%.
Business
1 answer:
gizmo_the_mogwai [7]3 years ago
4 0

Answer: 45%

Explanation:

Standard deviation for the portfolio will be a weighted average of the standard deviations of the individual assets.

Risky asset has standard deviation of 20%. Assume the weight is x.

Treasury bills have a standard deviation of 0 as they have no risk. Assume their weight is y.

Target Standard deviation is 9%.

Formula would be:

9% = (x * 20%) + (y * 0%)

20%x = 9%

x = 9% / 20%

x = 45%

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Compute the two-year nominal interest rate using the exact formula and the approximation formula for each set of assumptions lis
gregori [183]

Answer:

a) 2.5%

b) 6%

c) 3.5%

Explanation:

The Formula to be used is the <em>habitat hypothesis </em>

as stated in the document attached below

a)  it = 2%; it+1 =3%

i_{2,t} = 0 + ( 2 + 3 ) / 2

    = 2.5% ( two year nominal interest rate )

b) it = 2%;  it+1+1 = 10%

i_{2,t} = 0 + ( 2 + 10 ) / 2

     = 6% ( two year nominal interest rate )

c) it = 2%;  1t+1 = 3%. ∝₂,t = 1%

i_{2,t}  = 1 + ( 2 + 3 ) / 2

     = 1 + 2.5 = 3.5%

8 0
3 years ago
Zach sold a restaurant to Shane for $295,000. As part of the agreement, Zach promised not to open another restaurant business fo
levacccp [35]

Answer:

Non-compete clause

Explanation:

The name of this clause is Non-compete clause. It is is a clause under which one party agrees not to enter into or start a similar profession or trade in competition against another party. By prudence of this non compete clause, the worker attempts and gives his acknowledgment to the state of the business that over the span of the work or significantly after the representative leaves the administrations/occupation of the business, he will not be the contender of the business in the structure and nature of the work of the business.

5 0
3 years ago
X-inefficiency refers to a situation in which a firm: Group of answer choices fails to realize all existing economies of scale.
Veronika [31]

Answer:

fails to achieve the minimum average total costs attainable at each level of output.

Explanation:

X Inefficiency do take place in a firm when there is little or no incentive in controlling costs. As a result of this average cost of production will go up than necessary. And as a result of lack of incentives, technically, the firm will be far from efficient. It should be noted that X-inefficiency could be described as a situation in which a firm fails to achieve the minimum average total costs attainable at each level of output.

4 0
3 years ago
In a small manufacturing facility, one welder is needed for every 200 hours of machine-hours or fewer in a month. The welder is
Lerok [7]

Answer:

$16250

Explanation:

For every 200 hours of needed work, $2500 must be paid. We divide the amount of hours needed for 200 to obtain the amount of times that $2500 are paid. Multiplying this number by $2500 we obtain the total expense gor salaried employees.

frac{{1300}{200}}x2500

6 0
3 years ago
Spartan Corporation, a U.S. corporation, reported $2 million of pretax income from its business operations in Spartania, which w
pashok25 [27]

Answer:

A. = (15% X $2M) + (21% X $2M) = $720,000. Since there is no mechanism for mitigating double taxation, the branch profit will be taxed on the to tax rate of 15% and 21% which is $300,000 and $420,000.

B. The total tax for $2m branch profit if US corporations can remove foreign based profit from US taxation will be just the 15% x $2m = $300,000.

C.If they are allowed to take deductions for foreign income taxes, the total tax on the $2m branch profit will be (21% -15%) x $2m = $120,000.

Explanation:

D.1. If credit are allowed for foreign income tax paid, total tax will be ($2m - $300,000 been foreign tax paid) x 21% = $357,000

D.2.

If the charge foreign income taxes at 30% and US corporations can claim refundable credit for foreign income tax paid on foreign source income = ($2m - $300,000 been the foreign income tax paid) = $1 700,000 x 30% = $510,000

8 0
3 years ago
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