1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
melisa1 [442]
2 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]2 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%

You might be interested in
You are following the ____ strategy if you are concentrating on serving a particular segment of customers better.
Anastasy [175]

Target marketing happens in a company first divides the market into segments and then decides which segment is most likely to buy their product. This strategy would then cause the company to concentrating on serving a particular segment of customers better.

5 0
2 years ago
Read 2 more answers
To reduce the risk of starting a small business, the government can
Mademuasel [1]
The government can require licenses in order to start the small business. This keeps the small business accountable and the government and keep track of this.
3 0
3 years ago
The difference between overhead applied to work in process and actual overhead is ______. Multiple choice question. ending work
FromTheMoon [43]

debits Depreciation expense, while the other debits Manufacturing overhead

Yw and pls mark me as brainiest

5 0
1 year ago
Suppose Antonio and Caroline are playing a game in which both must simultaneously choose the action Left or Right. The payoff ma
Akimi4 [234]

Answer: See explanation column for answer

Explanation:

                                Caroline

                           left           Right

Anthonio   left   6,6             6,3

                  Right  4,3            5,5

The first digits in both left and right  is Anthonio's best response payoff given what Caroline chooses. Also, the second digit on both left and right is Caroline's best response payoff  based on what Anthonio chooses.

When Antonio chooses left, Caroline should choose left so as to get a payoff of 6, also when Antonio chooses right, Caroline chooses right to get a payoff of 5. therefore, there is no dominant strategy for Caroline.

The dominant strategy for Antonio occurs  

When Caroline chooses left, Antonio will have to choose left to get a payoff of 6, also when  Caroline chooses right, Antonio should choose left to get a payoff of 6. So, the dominant strategy for Antonio is to choose left.

The only dominant strategy in this game is for Antonio, to choose left.

b).  For Nash Equilibrum, Antonio will have to choose his dominant strategy, that is to choose left, which will make  Caroline is to choose left so as to get a payoff of 6. So, the Nash equilibrium is for Antonio to choose <u>left </u>and caroline chooses<u> left</u> too

8 0
2 years ago
The income statement for the month of June of Camera Obscura Enterprises contains the following information: Sales Revenues $7,0
Ivahew [28]

Answer:

a debit balance of $1,300

Explanation:

Generally in the income statement, a net profit is the excess of income over expenses during a given period and this will give a credit balance in the income statement, but this will be a debit balance in Income Summary to close the account.

On the other hand, a net loss is the excess of expenses over income during a given period and this will give a debit balance in the income statement, but this will be a credit balance in Income Summary to close the account.

Since Camera Obscura Enterprises made a net profit of $1,300 in the month of June, the balance in Income Summary will therefore be a debit balance of $1,300.

4 0
3 years ago
Other questions:
  • The average noise level in a diner is 30 decibels with a standard deviation of 6 decibels. ninety-nine percent of the time, the
    13·1 answer
  • Advancements in medical technology often lead to new careers.<br><br> True<br> False
    10·2 answers
  • You want to provide spending money for your 4 year old during their college years. You can afford to deposit $600/year for the n
    9·1 answer
  • A client who owns an online running shoe store wants to drive sales of a particular model of women's running shoes. What keyword
    9·1 answer
  • One of the largest changes in the economy over the past several decades is that technological advances have reduced the cost of
    9·1 answer
  • How is owner’s equity affected when is paid for expenses?
    8·1 answer
  • Indicate the section operating activities,investing activities,financing activities,or none in which each of the following would
    11·1 answer
  • What is bancassurance?
    11·1 answer
  • Novak Corporation purchased 380 shares of Sherman Inc. common stock for $12,900 (Novak does not have significant influence). Dur
    14·1 answer
  • Majestic Theaters has plans to build a new $30 million movie theater and intends to finance this project through the sale of add
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!