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melisa1 [442]
3 years ago
7

Consider two perfectly negatively correlated risky securities A and B. A has an expected rate of return of 12% and a standard de

viation of 70%. B has an expected rate of return of 8% and a standard deviation of 40%. The global minimum variance portfolio that can be formed with the two securities will earn _____ rate of return.
Business
1 answer:
Alex_Xolod [135]3 years ago
3 0

Answer: 9.45%

Explanation:

To solve this question, we need to know the weights of securities A and B and this will be:

Weight of A = STD of B / (STD of A + STD of B)

= 40% / (70% + 40%)

= 40% / 110%

= 0.4/1.1

= 0.3636

Weight of security A = 0.3636

Weight of security B = 1 - 0.3636 = 0.6364

Then, the rate of return of risk free portfolio will be:

= (Return of A × Weight of A) + (Return of B × Weight of B)

= (12% × 0.3636) + (8% × 0.6364)

= 0.043632 + 0.050912

= 0.094544

= 9.45%

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Internal control is a process designed to ensure
Sauron [17]

Answer:

Internal Control is designed to ensure all of the items described in the answer.

Explanation:

Internal control refers to the control measures adopted by an entity so as to ensure compliance with legal framework, check frauds and errors and for reliable financial reporting.

Compliance procedures are the processes designed to check whether internal controls exist in an organization and if they do, whether such controls are operating effectively.

For e.g biometric authentication with regard to attendance keeps a check on the number of employees actually working during a period and eliminates the possibility of dummy names in the attendance records. This is an example of internal control i.e control measures created by organization itself.

8 0
3 years ago
you own 100 shares in each of three companies, each company pays a dividend. gillete pays 1.15 per share in dividends, general e
Elena-2011 [213]

Answer:

$278

Explanation:

100 * 1.15 = $115

100 * .79 = $79

100 * .84 = $84

$278

Hope this helps

3 0
3 years ago
Use the following information to determine the ending cash balance to be reported on the month ended June 30 cash budget.
sweet-ann [11.9K]

Answer:

D. $53,000.

Explanation:

The computation of the ending cash balance is shown below:

Beginning cash balance $95,000

Add: Receipts  

Cash sales  $418,000

Total cash receipts (a) $513,000

Deduct: Payments:  

Cash payment for purchases -$273,000

 Cash payment for salaries -$96,000

Other cash expenses -$58,000

Repayment of bank loan -$33,000

Total cash payments (b) $460,000

Net receipts /( payments) (a) - (b) $53,000

6 0
2 years ago
Describe voluntary exchanges
Ann [662]

Voluntary exchange is the actions of buyers and sellers freely coming together in the marketplace to buy and sell goods. They are not restricted or told what to buy, how to buy it, or how much, by the government or any other regulator.

6 0
3 years ago
The accounting records for Eisner Manufacturing Company included the following cost information relating to its first year of op
Lorico [155]

Answer:

Option (d) : $24.8 and $15.7

Explanation:

As per the data given in the question,

Number of units produced = 10,000

Number of units sold = 6,000

Cost per unit = Amount/ 10,000

                                                               Absorption            Variable  

Direct material                                                $5.2                 $5.2

Direct Labor                                                    $8                     $8

Variable manufacturing overhead                  $2.5                  $2.5

Fixed manufacturing overhead                       $9.1                  $9.1

Unit product cost                                           $24.8                $15.7

4 0
3 years ago
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