Business, 07.10.2019 22:00 lululoveee5256
The rate of return of an asset is the change in price divided by the initial price (denoted as r). suppose that $10,000 is used to purchase shares in three stocks with rates of returns x1, x2, x3. initially, $2500, $3000, and $4500 are allocated to each one, respectively. after one year, the distribution of the rate of return for each is normally distributed with the following parameters: μ1 = 0.12, σ1 = 0.14, μ2 = 0.04, σ2 = 0.02, μ3 = 0.07, σ3 = 0.08. a. assume that these rates of return are independent. determine the mean and variance of the rate of return after one year for the entire investment of $10,000. b. assume that x1 is independent of x2 and x3 but that the covariance between x2 and x3 is −0.005. repeat part (a). c. compare the means and variances obtained in parts (a) and (b) and comment on any benefits from negative covariances between the assets.
Answers: 1
Business, 22.06.2019 11:00
You decide to invest in a portfolio consisting of 25 percent stock a, 25 percent stock b, and the remainder in stock c. based on the following information, what is the expected return of your portfolio? state of economy probability of state return if state occurs of economy stock a stock b stock c recession .16 - 16.4 % - 2.7 % - 21.6 % normal .55 12.6 % 7.3 % 15.9 % boom .29 26.2 % 14.6 % 30.5 %
Answers: 1
Business, 22.06.2019 14:00
Your dormitory, griffingate, has appointed you central banker of its economy, which deals in the currency of wizcoins. assume that the velocity of wizcoins in griffingate is constant at 10,000 transactions per year. right now, real gdp is 1,000 wizcoins, and there are 2,000 wizcoins in existence.
Answers: 2
Business, 22.06.2019 19:30
Anew firm is developing its business plan. it will require $615,000 of assets, and it projects $450,000 of sales and $355,000 of operating costs for the first year. management is reasonably sure of these numbers because of contracts with its customers and suppliers. it can borrow at a rate of 7.5%, but the bank requires it to have a tie of at least 4.0, and if the tie falls below this level the bank will call in the loan and the firm will go bankrupt. what is the maximum debt ratio the firm can use? (hint: find the maximum dollars of interest, then the debt that produces that interest, and then the related debt ratio.)a. 41.94%b. 44.15%c. 46.47%d. 48.92%e. 51.49%
Answers: 3
Business, 22.06.2019 22:00
The following table gives the map coordinates and the shipping loads for a set of cities that we wish to connect through a central hub.,(7,(4,(7,(6,(2,( 2,) for the location of the proposed new central hub, the coordinates should be near: x==) if the shipments from city a double, for the location of the proposed new central hub, the coordinates should be near: x==.926.865.017.21
Answers: 1
The rate of return of an asset is the change in price divided by the initial price (denoted as r). s...
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