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ollegr [7]
2 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]2 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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Cash flows: Hillman Corporation reported current assets of $3,495,055 on December 31, 2017 and current assets of $3,103,839 on D
Nuetrik [128]

Answer:

$284,115

Explanation:

Computation for the cash flow invested in net working capital at Hillman Corporation during 2017.

First step is to calculate the Net working capital for 2017

Net Working Capital 2017 = $3,495,055 - $2,867,225

Net Working Capital 2017 =$627,830

Second step is to calculate the Net Working Capital for 2016

Net Working Capital 2016 = $3,103,839 - $2,760,124

Net Working Capital 2016= $343,715

Now let calculate the cash flow invested in net working capital

2017 Cash flow invested in net working capital=$627,830-$343,715

2017 Cash flow invested in net working capital=$284,115

Therefore the cash flow invested in net working capital at Hillman Corporation during 2017 will be $284,115

4 0
3 years ago
Ayayai Inc. presented the following data. Net income $2,680,000 Preferred stock: 48,000 shares outstanding, $100 par, 8% cumulat
bezimeni [28]

Answer:

$1.35 per share

Explanation:

Note: See the attached excel file for the calculation of the weighted shares outstanding.

The earnings per share can be computed as follows:

Weighted shares outstanding = 1,702,000 shares

Preferred stock dividend = 48,000 * $100 * 8% = $384,000

Net income = $2,680,000

Net income after preferred stock dividend = $2,680,000 - $384,000 = $2,296,000

Earnings per share = Net income after preferred stock dividend / Weighted shares outstanding = $2,296,000 / 1,702,000 = $1.35 per share

Download xlsx
4 0
3 years ago
Technoid Inc. sells computer systems. Technoid leases computers to Lone Star Company on January 1, 2018. The manufacturing cost
Llana [10]

Answer:

$89,350

Explanation:

Calculation to determine the outstanding balance of the lease liability in Lone Star's December 31, 2018, balance sheet

First step is to calculate the Balance after first payment

Initial lease liability $130,000

Less: First payment $23,000

Balance after first payment $107,000

Second step is to calculate the Interest expense for June 30,2021

Interest expense for June 30,2021= $107,000*5%

Interest expense for June 30,2021=$5,350

Third step is to calculate the Principal payment for June 30,2021

Principal payment for June 30,2021=$23,000-$5,350

Principal payment for June 30,2021=$17,650

Now let calculate the Outstanding balance on June

Balance after first payment. $107,000

Less: Principal payment for June $17,650

Outstanding balance on June $89,350

Therefore the outstanding balance of the lease liability in Lone Star's December 31, 2018, balance sheet is $89,350

8 0
3 years ago
Interest earned on both the initial principal and the interest reinvested from prior periods is called _______.
scZoUnD [109]

Answer:

<em> </em><em>interest </em><em>earned</em><em> </em><em>on </em><em>both</em><em> </em><em>the </em><em>initial</em><em> </em><em>principal</em><em> </em><em>and </em><em>the </em><em>interest </em><em>reinvested </em><em>from </em><em>prior </em><em>periods </em><em>is </em><em>called </em><em><u>compound</u></em><em><u> </u></em><em><u>interest</u></em><em><u>.</u></em>

________________________________

<em>Compound </em><em>interest</em><em>.</em><em> </em><em>The </em><em>interest</em><em> </em><em>which </em><em>is </em><em>added </em><em>on </em><em>to </em><em>the </em><em>initial</em><em> </em><em>investment</em><em>,</em><em> </em><em>so </em><em>that</em><em> </em><em>this </em><em>will </em><em>itself</em><em> </em><em>gain </em><em>interest </em><em>in </em><em>subsequent</em><em> </em><em>perio</em><em>d</em><em>s.</em>

7 0
2 years ago
A peer-review board for alternative dispute resolution usually consists of: A. an equal number of employee representatives and m
kow [346]

Answer:

The answer is option A) A peer-review board for alternative dispute resolution usually consists of: an equal number of employee representatives and management appointees

Explanation:

Alternative dispute resolution is an affordable, less time consuming and less formal way of settling workplace disputes. To achieve this feat, a peer review board is constituted.

A peer review board usually consists of employers and management appointees and it could be a voluntary decision on their art to participate.

The pool of individuals nominated to be part of  the peer review board is considered objective and unbiased in their assessment of the issue to be resolved. They are also deemed skillful in the art of listening and arbitration.

8 0
3 years ago
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