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stiv31 [10]
3 years ago
12

Your client, Bo Regard, holds a complete portfolio that consists of a portfolio of risky assets (P) and T-Bills. The information

below refers to these assets. E(Rp) 12.00 % Standard Deviation of P 7.20 % T-Bill rate 3.60 % Proportion of Complete Portfolio in P 80 % Proportion of Complete Portfolio in T-Bills 20 % Composition of P: Stock A 40.00 % Stock B 25.00 % Stock C 35.00 % Total 100.00 % What is the expected return on Bo's complete portfolio
Business
1 answer:
babymother [125]3 years ago
6 0
Your client, Bo Regard, holds a complete portfolio that consists of a portfolio of risky assets (P) and T-Bills. The information below refers to these assets. E(Rp) 12.00 % Standard Deviation of P 7.20 % T-Bill rate 3.60 % Proportion of Complete Portfolio in P 80 % Proportion of Complete Portfolio in T-Bills 20 % Composition of P: Stock A 40.00 % Stock B 25.00 % Stock C 35.00 % Total 100.00 % What is the expected return on Bo's complete portfolio?

A. 3.48 % B. 7.55 % C. 9.28 % D. 10.67 % <--Correct Answer

E(Rp) = (1/6)*0% + (1/2)*7% + (1/3)*12% = 9,33% or about 9,3%.

This is the correct answer.
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Directed to ultimate consumers, consumer-oriented sales promotions are sales tools used to support a company's __________ and __
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Directed to ultimate consumers, consumer-oriented sales promotions are sales tools used to support a company's <u> advertising</u> and<u> personal selling</u>.

<h3>What is sales promotion?</h3>

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Most companies or organization tend to makes use of sales promotion as a form of advertising in order to create product or brand awareness.

Therefore Directed to ultimate consumers, consumer-oriented sales promotions are sales tools used to support a company's <u> advertising</u> and<u> personal selling</u>.

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5 0
2 years ago
On January 1, 2019, Cullumber Company had $1,000,000 of common stock outstanding that was issued at par. It also had retained ea
Flauer [41]

Answer:

<em>a. Par value is $10, and market price is $19. b. Par value is $5, and market price is $20.</em>

Explanation:

4 0
3 years ago
Whenever significant expansionary policies are implemented and left in place for at least half a year or more, the likely result
ankoles [38]

Answer:

It starts effecting price level - inflationary pressure in economy.

Explanation:

Expansionary policies are aimed at increasing Aggregate Demand, by Fiscal or monetary approach.

Fiscal expansion policy include increasing government public expenditure, reducing government tax revenue. Monetary Expansion policy aim include credit expansion - from decreased LRR, decreased bank rate, decreased marginal requirement etc

Significant expansion policy left for more than half an year, start exerting inflationary pressure on the economy price level.

8 0
3 years ago
Read 2 more answers
study Assume that you are going to invest $120,000 in a two asset portfolio. You will invest $80,000 in the fully diversified ma
Ratling [72]

Answer:

9.33%

Explanation:

The expected return of  two asset portfolio is the weighted average of individual assets' expected to return as computed thus:

Portfolio expected return=(weight of market portfolio*expected return of market portfolio)+(weight of riskless security*expected return of riskless security)

weight of market portfolio=amount invested in market portfolio/total invested amount

weight of market portfolio=$80,000/$120,000=66.67%

expected return of market portfolio=market risk premium+riskless return

expected return of market portfolio=8%+4%=12%

weight of riskless security=1-66.67%=33.33%(since total investment which is 100% is 1)

expected return of riskless security=4%

Portfolio expected return=(66.67%*12%)+(33.33%*4%)

Portfolio expected return=\=9.33%

5 0
3 years ago
Rank the following instruments in terms of credit risk. In your rankings, use 1 for the greatest credit risk and 4 for the small
bija089 [108]

Answer:

a. A Ba1 corporate bond <u>2 (not investment grade)</u>

b. A ten-year BBB- corporate bond with a YTM of 7% <u>3 (medium risk but still investment grade)</u>

c. A secured loan from Argosy Gaming, which is a B- rated firm <u>4 (less risky since it is backed by a collateral)</u>

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Explanation:

There are two major bond rating agencies in the US: Moody's and Standard & Poor's.

Their rankings are very similar, although the letters vary a little:

AAA: safest

AA: low risk

A: low risk

BBB: medium risk

BB: a little bit more riskier

B: risky

CCC: very high risk

CC: even riskier

C: riskiest

D: junk, in default

8 0
3 years ago
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