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
Svetach [21]
3 years ago
9

A portfolio manager has maintained an actively managed portfolio with a beta of 0.2. During the last year the risk-free rate was

5% and equities performed very badly providing a return of −30%. The portfolio manage produced a return of −10% and claims that in the circumstances it was good.
Business
1 answer:
trapecia [35]3 years ago
5 0

Answer: See explanation

Explanation:

The formula to use here will be:

required rate = risk free rate + beta × (market return - risk free rate).

where,

risk free rate = 5%

beta =0.20.

market return = -30%.

Therefore,

required return = 5% + 0.20 × (-30% + -5%)

= 5% + 0.2(-35%)

= 5% - 7%

= -2%

Therefore, the return on portfolio should have been -2% but the portfolio manager produced a return of −10%

Since -10% is lower than -2%, we can deduce that the claim of the manager is wrong.

You might be interested in
Write two sentences that explain what this evidence tells you about Manjiro’s culture.
Montano1993 [528]

Manjiro presents a sword and short knife to his friend. The way that he and his friend talk about them show that they are important in Japanese culture.

mark me brainlist plz

7 0
2 years ago
Which of the following statements is not a difference between business markets and consumer​ markets?A. Buyers face more compl
marusya05 [52]

Answer:

E : the market is very small and limited

Explanation:

The statement that the market is very small and limited  is not a difference between business markets and consumer markets as the real difference is :

Business market larger in size :

If we talk from a Marketing Perspective point of view it Innovates through technological push and fanatics-breakthroughs which result in a rapid increase in the number of customers in the market and as the size of the market becomes larger.

3 0
3 years ago
Suppose the production of cotton causes substantial environmental damage because the pesticides used by cotton farmers often mak
Kipish [7]

Answer: C. inefficiently low; inefficiently high

Explanation:

If the cotton farmers are not made to pay for the damage that their pesticides cost then they will maintain production at a relatively high level because their input costs will be relatively low. As a result of this high level of production, the price of the goods will be relatively low as well. The point at which both market equilibrium quantity and price are at in this scenario are considered inefficient because they are not taking into account, the true cost of production being the effects of the pesticides being used.

However, if they are made to pay for this negative externality that they are the cause of, it will increase their production cost and force them to reduce production to keep these costs low. As they reduce production, the market price will increase as supply is less.

5 0
3 years ago
You expect KT industries​ (KTI) will have earnings per share of $ 6 $6 this year and expect that they will pay out $ 1.25 $1.25
Hatshy [7]

Answer:

$8.93

Explanation:

The payment made to the stockholders is known as dividend.

Price of the stock can be determined by calculating the present value of all future expected dividends using cost of capital.

In this question $1.25 per share dividend is paid and rate of return / cost of capital is 14%, so price of stock will be calculated as follow.

Price of the share = Dividend / Cost of Capital = $8.93

Price of the share = $1.25 / 14% = $8.93

5 0
3 years ago
A company has beginning inventory for the year of $13,000. During the year, the company purchases inventory for $150,000 and end
WARRIOR [948]

Based on the opening and closing inventories as well as the purchases, the company cost of goods is $138,000.

<h3>What are the cost of goods sold?</h3>

This can be found as:

= Opening inventory + purchases - closing inventory

Solving gives:
= 13,000 + 150,000 - 25,000

= $138,000

Find out more on cost of goods sold at brainly.com/question/24561653.

#SPJ1

8 0
1 year ago
Other questions:
  • Buckeye Corporation adopted dollar-value LIFO on January 1, 2021, when the inventory value was $514,000 and the cost index was 1
    10·1 answer
  • Polychromasia Company sold inventory costing $30,000 to its subsidiary, Simply Colorful, for double its cost in 2009. Polychroma
    13·1 answer
  • An important quantity in number theory referred to as __________ is defined as the number of positive integers less than n and r
    8·1 answer
  • Which of the following is the most important factor in successful new-product introduction? Group of answer choices ​The new pro
    5·2 answers
  • Gina and Bill are managers for two separate projects; both freely express their anger at work. Compared to Bill, Gina is more li
    5·1 answer
  • Assume there are no prospective investment projects (I) that will yield an expected rate of return (r) of 25 percent or more, bu
    15·1 answer
  • A university conducts a survey of students, which shows that a 10 percent tuition hike would lead to a 7 percent decrease in the
    10·1 answer
  • Suppose that real GDP per capita in Italy is $32,000. If real GDP per capita is growing at a rate of 2.5% per year, how many yea
    12·1 answer
  • If an economy produced 220 pounds of jelly beans at $5 per pound and 90 pounds of gum drops at $2 per pound in 2016, its real gr
    7·1 answer
  • When a government fines and/or imprisons persons convicted of using illegal drugs, the government is attempting to decrease the
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!