Intensity pertains to the amount of effort being invested in an activity. Group startsTrue or False

You have been managing a $3 million portfolio. The portfolio has a beta of 1.10 and a required rate of return of 10%. The curren

riadik2000 [5.3K]

Answer:

The Required rate of return on Portfolio is 9.67%

Explanation:

In order to get the answer first we need to calculate the new beta of portfolio. The weight of portfolio and new stock is calculated using total value of investment in portfolio and multiplying by the total investment we get new beta.

(3M / 3.6M) x 1.10 + (0.6M / 3.6M) x 0.60 = 1.01667

Through using the CAPM Model we get risk premium of Existing Portfolio:

Required rate of return of portfolio = RF + ( Rm - RF ) x beta

10% = 5.6% + (Rm -RF) x 1.10

10% - 5.6% = (Rm - RF) x 1.10

4.4% / 1.10 = (Rm - RF)

(Rm - RF) = 4%

After getting the Risk Premium we can CAPM model equation to get New Required rate of return.

Required rate of return of portfolio = RF + ( Rm - RF ) x beta

Required rate of return of portfolio = 5.6% + 4% x 1.01667

Required Rate of Return of Portfolio = 9.67%

8 0

3 years ago

ABC stock has just closed at $70.50. A customer has an open order on the Specialist's book (DMM's book) to sell short 100 shares

Rudiy27

Answer:

A) Sell short 100 ABC at 69.45 Stop

Explanation:

When an order is placed below the market (OBLOSS - Open Buy Limits Open Sell Stops) it will be adjusted on the specialist's book for distributions on ex date. This open sell stop order = $70 - $0.55 (dividend) = $69.45

So the adjusted order will be: Sell short 100 ABC at 69.45 stop.

7 0

3 years ago

On April 30, Gomez Services had an Accounts Receivable balance of $31,200. During the month of May, total credits to Accounts Re

Kazeer [188]

Answer:

What was the amount of credit sales during May? $ 60200

Explanation:

April Deb Cre May

Account receivable 31200 66400 25000

31200 60200 66400 25000

Credit 66400 +

may-31 25000 +

apri-30 -31200 -

= 60200

5 0

3 years ago

For the last five years, the HR manager at Fresh Foods has been asking all applicants to appear for a test. The HR manager now i

Troyanec [42]

Answer:

The correct answer is predictive validity test.

Explanation:

A predictive validity test is carried out in order to predict the performance that a collaborator will have in the future. With this dynamic, it is ensured that an honest employee is hired, and that he always acts under the rules of the organization to which he will belong. In general, there are discrepancies compared to what many people can do under certain circumstances, and this test is precisely what they want to know about the performance under different scenarios.

8 0

3 years ago

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Reviewing the Budget

vekshin1

Answer:

For each month we calculate the variance by finding the difference between the Actual numbers and Budget numbers.

Then we indicate if the practice was "Overbudget" or "Underbudget".

If the actual numbers are less than the budget numbers, the budget is we say that the budget is under budget.

If the actual numbers are more than the budget numbers, the budget is we say that the budget is over budget.

Month Budget Actual Variance Under/ over

<u> (Actual -Budget) Budget </u>

January 23,55,872 17,90,929 -5,64,943 Under Budget

February 26,54,031 28,27,606 1,73,575 Over Budget

March 22,39,980 29,24,180 6,84,200 Over Budget

4 0

3 years ago

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