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ollegr [7]
3 years ago
5

Assume that investors can borrow and lend at risk-free rate of 5%. The optimal tangent portfolio on the efficient frontier has a

n expected return of 15%, and STD of 20%. John would like to construct his complete investment portfolio by allocating funds between the risk-free asset and the optimal tangent portfolio. Which of the following complete portfolios can John NOT achieve?
A. Portfolio A with E(R)=17.5% and STD=25%
B. Portfolio B with E(R)=13% and STD=18% c. Portfolio
C with E(R)=10% and STD=10% d. Portfolio
D with E(R)=5.5% and STD=1%
E. None of the above.
Business
1 answer:
gizmo_the_mogwai [7]3 years ago
5 0

Answer:

B. Portfolio B with E(R)=13% and STD=18%

Explanation:

The computation is shown below;

Reward to risk ratio = (15% - 5%) ÷ 20% = 0.5

The porfolio should be in line i.e.

= 0.05 + 0.5 × standard deviation

For portfolio A

= 0.05 + 0.5 × 25

= 17.5%

For portfolio C

= 0.05 + 0.5 × 1

= 5.5%

Portfolio B, the std is 18%

So,

= 0.05 + 0.5 × 18%

= 14%

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In other words, standard cost is the estimated sum of money a business will need to spend in order to create a something or provide a service under typical circumstances. Examples include payments due for rent, utilities, insurance, office staff salary, and supplies, among others. the normal fixed cost is $100,000, and the hourly rate is $15.

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7 0
2 years ago
Two years from now, the YTM on your bond has declined by 1 percent, and you decide to sell. What price will your bond sell for?
yanalaym [24]

You did not post the complete question so I will write only the missing components below that is needed to answer the question and some important definitions.

Definitions:

PVIFA - present value interest factor of annuity

PVIFA = \frac{1-(1+\frac{r}{t} )^{-n \times t } }{\frac{r}{t} }

t = number of regular intervals per year at which time the borrowed amount is to be paid back

r = annual interest rate

n = number of years to payoff the debt

We need to find the interest rate that equates the price we paid for the bond with the cash flows we received. The cash flows we received were $100 each year for two years and the price of the bond when we sold it. Also, remember the YTM on the bond has declined by 1 percent.

Let us assume a par value of $1,000. we need to find the price of the bond in two years. The price of the bond in two years, at the new interest rate, will be:

$100(PVIFA8.42%,17) + $1,000(PVIF8.42%,17) = $1,139.69

Answer:

Therefore, the bond will sell for $ 1,139.69 ± 0.1%

8 0
3 years ago
In 2014, the city of Miketown collected $150,000 in taxes and spent $350,000. In 2014, the city of Miketown had a
Damm [24]

Answer:

Budget deficit of $100,000

Explanation:

Calculation to determine how much the city of Miketown had

Budget deficit=Amount collected in taxes - Amount spent

Let plug in the formula

Budget deficit=$250,000-$350,000

Budget deficit =$100,000

Therefore in 2014 the city of Miketown had a BUDGET DEFICIT of $100,000

8 0
3 years ago
7. Which of the following both shift aggregate demand left? a. a decrease in taxes and at a given price level consumers feel mor
GrogVix [38]

Answer:

<h2>In this case,the answer would be option d. or an increase in taxes and at a given price level consumers feel less wealthy.</h2>

Explanation:

  • Aggregate Consumption Expenditure is an important component or determinant of the aggregate demand(AD) which positively or directly affects the AD,meaning that a general increase in the aggregate consumption expenditure will increase the AD in the economy and vise versa.
  • Now,an increase in income tax is evidently a bad news for the consumers or buyers in the economy as the disposable household income would decrease as a result and the consumers or buyers would have less money or income at their disposable to spend on various goods and services in the economy.
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6 0
3 years ago
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ivolga24 [154]

Answer: Finance, purchasing, accounting, suppying

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The following are activities of the retailer, although it might not be all followed by many retailers but depending on their ability and understanding

-Finance

-Purchasing

-Accounting

-Management Information System

-Supply management including warehouse and distribution management.

3 0
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