Answer:
The risk will be reduced by 0.109
Explanation:
Standard deviation for stock A = 49%
Standard deviation for stock B = 49%
Correlation = 0.2
Let's use the standard deviation of portfolio equation:
Where
= 100% - 56% = 44%
= 0.381 = 38.1%
The risk will be reduced by:
(0.56*0.49)+(0.44*0.49)-0.381
= 0.109
Answer:
c. $24,000
Explanation:
The computation of sale by partnership is shown below:-
The pre-contribution gain allocated to Tina = Fair market value - Adjusted basis
= $80,000 - $60,000
= $20,000
Gain on sales = Partnership to an unrelated third party - Fair market value
= $90,000 - $80,000
= $10,000
Tina partnership interest is 40 % of $10,000
= $4,000
Sale by partnership = pre-contribution gain + Tina partnership
= $20,000 + $4,000
= $24,000
Therefore for computing the sale by partnership we simply applied the above formula.
Loose valuable customers
Loose the trust of the people
The business might run a loss
