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NeX [460]
2 years ago
5

You own a portfolio that has a total value of $215,000 and it is invested in Stock D with a beta of .86 and Stock E with a beta

of 1.39. The beta of your portfolio is equal to the market beta. What is the dollar amount of your investment in Stock D?
Business
1 answer:
babunello [35]2 years ago
4 0

Answer:  BP = BD(WD) + BE(WE)

                   1 = 0.86(1-WE) + 1.39WE

                   1 = 0.86-0.86WE + 1.39WE

                   1 = 0.86 + 0.53WE

                 -0.53WE = -0.14

                  0.53WE  = 0.14

                         WE   = 0.14/0.53

                         WE   = 0.2641509434

                         WD = 1 - WE

                         WD = 1 - 0.2641509434

                         WD = 0.7358490566

The dollar amount of investment in stock D = 0.7358490566 x $215,000

                                                                         = $158,207.54

Explanation: The beta of the portfolio is 1, which corresponds to the beta of the market. The beta of the portfolio equals beta of each stock multiplied by the percentage of fund invested in each stock(weight). The weight of stock D is equal to 1 - weight of stock E. Therefore, we need to make weight of stock E the subject of the formula by solving the problem mathematically and collecting the like terms. The weight of stock E is 0.2641509434. The weight of stock E will be subtracted from 1 so as to obtain the weight of stock D, which is 0.7358490566. The dollar amount of stock D equal to $215,000 multiplied by 0.7358490566, which is $158,207.54.

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The Doritos advertising effort of "Live Mas," which is Spanish for "Live More," is meant to suggest a lifestyle aspiration. If c
vagabundo [1.1K]

Answer:

C

Explanation:

The consumers associated the saying with the Doritos brand.

7 0
3 years ago
In year 1 the average price of X is $10, and in year 2 the average price of X is $23. If consumers buy more units of X in year 2
xeze [42]

Answer:

D

Explanation:

Normal goods are goods that are goods whose demand increases when income increases and falls when income falls

If good X is a normal good and the consumers income increases, the demand for good X would increase

It would have been that the Law of demand not supply that didn''t hold

according to the law of supply, the higher the price, the higher the quantity supplied and the lower the price, the lower the quantity supplied.

According to the law of demand, the higher the price, the lower the quantity demanded and the lower the price, the higher the quantity demanded.

8 0
2 years ago
Your boss, Penny Dirks, has asked you to analyze the airline industry using Porter's Three Generic Strategies. Which of the foll
vodomira [7]

Answer:

The correct answer is A.

Explanation:

Low cost companies, such as Southwest, Horizon, Frontier and JetBlue, are already one of the first options when organizing a trip. Flying is easier and more accessible every day, partly thanks to the low prices that airlines offer us, but also more uncomfortable, so you may ask yourself: what tricks do airlines use to make flying so cheap now?

  1. Point to point routes. Low-cost companies do not offer transshipment services (network), so they save the cost of moving luggage from one plane to another and do not have to worry about the costs of connections between their routes.
  2. Staff costs. When operating point-to-point flights and only short and medium radius, low cost never pay hotels to their crews to spend the night outside the airport where they are destined. Pilots and cabin staff always return to their base. In addition, their salaries are usually lower than those of traditional airline personnel.
  3. Small airports. Operating in small airports and far from the main urban centers allows these airlines to avoid traffic jams, thus saving fuel and time.
  4. Homogeneous fleet. Low cost usually use modern fleets and similar models, allowing them significant savings in maintenance.
  5. Reduced services. These low-cost airlines do not serve meals, cut seat space and eliminate seat allocation, which saves a lot of time, but also money.
  6. Additional income. Most low-cost airlines promote a wide range of gifts and lotteries on board, which gives them significant extra income.
  7. It pays for everything. The reservation of tickets, billing at a counter and the right to carry a suitcase in the hold of the plane is paid with low-cost airlines.
  8. Less expenses at the airport. Many low cost even give up having customer service offices, replacing them with call centers that involve a high cost of calling.
  9. Public incentives. Many public administrations grant great economic aid to these low costs to prevent them from stopping to fly to their airports.
  10. Very high rotation. Companies basically care about two things: get the maximum number of flights and fill the planes to the maximum. A plane is only profitable when it is flying, so more flights, more profitability.
3 0
2 years ago
Which of the following options is a better purchase for a bicycle?
Bess [88]

Answer:

Option 3: $12 down with equal payments of $5 for 12 months

Explanation:

In option 1 :

The cost is $ 88,

In option 2 :

Down payment = $ 5,

Weekly payment = $ 8,

Number of weeks = 10,

So, the total cost = 5 + 8 × 10 = 5 + 80 = $ 85,

In option 3 :

Down payment = $ 12,

Monthly payment = $ 5,

Number of months = 12,

So, the total cost = 12 + 5 × 12 = 12 + 60 = $ 72,

In option 4 :

Down payment = $ 20,

Monthly payment = $ 20,

Number of months = 12,

So, the total cost = 12 + 20 × 12 = 12 + 240= $ 252

∵ 72 < 85 < 88 < 252

Hence, option 3 is better.

6 0
3 years ago
The advantage of having many potential suppliers is their willingness to A. provide technical expertise. B. participate in JIT.
Stolb23 [73]

Answer:

d

Explanation:

the more the suppliers the more the competition would be among suppliers to gain customers. As a result, they would offer lower prices in the short run to customers to gain them.

In the long run, suppliers would leave the oversaturated industry and equilibrium would be restored.

6 0
2 years ago
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