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lora16 [44]
3 years ago
6

State of Economy Probability of State of Economy Rate of Return if State Occurs Recession .32 − .11 Boom .68 .23 Calculate the e

xpected return. 2) You own a stock portfolio invested 33 percent in Stock Q, 20 percent in Stock R, 37 percent in Stock S, and 10 percent in Stock T. The betas for these four stocks are 1.02, 1.08, 1.48, and 1.93, respectively. What is the portfolio beta
Business
2 answers:
Ratling [72]3 years ago
5 0

Answer:

a) Expected Return 12.12% b) Portfolio Beta 1.29

Explanation:

Expected return is calculated by sum of expected returns and the probability of the outcome

E(R) = (0.32*-0.11) + (0.68*0.23)

       =-0.0352 + 0.1564

        =0.1212/12.12%

The beta of a portfolio equals the sum of weighted average of the beta for all individual stocks held in the portfolio

Pβ =(Wq*βq)+(Wr*βr)+(Ws*βs)+(Wt*βt)

      =(0.33*1.02)+(0.20*1.08)+(0.37*1.48)+(0.10*1.93)

       =1.29

butalik [34]3 years ago
4 0

Answer:

1) Expected return is 12.12%

2) Portfolio beta is 1.2932

Explanation:

1)

The expected return can be calculated by multiplying the return in a particular state of economy by the probability of that state occuring.

The expected return = (0.32 * -0.11) + 0.68 * 0.23

Expected return = 0.1212 or 12.12%

b)

The portfolio beta is the the systematic riskiness of the portfolio that is unavoidable. The portfolio beta is the weighted average of the individual stock betas that form up the portfolio.

Thus the portfolio beta will be,

Portfolio beta = 0.33 * 1.02 + 0.2 * 1.08 + 0.37 * 1.48 + 0.1 * 1.93

Portfolio beta = 1.2932

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iren2701 [21]

Answer:

Total cost = $3477.5

Explanation:

Given the following data;

Sales tax = 7%

Cost price = $3250.00

To find the total cost for the printer;

First of all, we would determine the sales tax

Sales tax = 7/100 * 3250

Sales tax = 7 * 32.5

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Now, we can find the total cost;

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Total cost = $3477.5

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3 years ago
You are offered a chance to buy an asset for $200,500 that is expected to produce cash flows of $100,000 at the end of Year 1, $
Lapatulllka [165]

Answer:

What rate of return (IRR) would you earn if you bought this asset?

8,48%

Explanation:

To find the IRR it's necessary to know which is the discount rate that applied to the cash flow of the assets gives a value that compensate the investment of $200,500.

Year 1   $100.000  / (1+0,0848)^1    =  $92.182    

Year 2   $100.000  / (1+0,0848)^2  =  $35.690  

Year 3   $100.000  / (1+0,0848)^3  =   $41.398  

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Total Present Value of Cash  Flow=

$92.182  + $35.690 + $41.398 + $31.230 =  $200,500

There is no way to find the IRR without Excel, the only way is to try with different rates in the current cash flow formula.

3 0
2 years ago
True or false. the emotional needs of human infants are as important as their physical needs
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True! Instances of babies that are treated poorly both mentally and physically can equally affect the mental health of that child as they grow up.
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Answer:

The correct answer is letter "B": Positive reinforcement and punishment.

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Thus, <em>Jim is implementing positive reinforcement through incentives for workers meeting certain corporate goals and positive punishment by withholding those incentives from employees who get late, take long breaks or act unprofessionally</em>.

6 0
3 years ago
Buckshot Electronics is a chain of electronics superstores that is located throughout California. They have 15 locations concent
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Answer:

Explanation:

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