answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Montano1993 [528]
2 years ago
9

Stock A has an expected return of 8%, stock B has an expected return of 2%, and the return on Treasury-Bills is 4%. You buy $200

of A, short $100 of B and invest the short proceeds in Treasury Bills. What is the expected return of your portfolio?
Business
1 answer:
Tomtit [17]2 years ago
3 0

Answer:

The expected return of your portfolio is 6.02%

Explanation:

Stock     Value     Expected Rate of return   Weightage

  A          $200                   8%                      $200/$300 = 0.67

  B          $100                    2%                      $100/$300 = 0.33

Expected Rate of return = ( Expected rate of return Stock A x Weightage of Stock A ) + ( Expected rate of return Stock B x Weightage of Stock B )

Expected Rate of return = ( 8% x 0.667 ) + ( 2% x 0.33 )

Expected Rate of return = 0.0536 + 0.0066 = 0.0602 = 6.02%

You might be interested in
Producer surplus directly measures a. the well-being of buyers and sellers. b. the well-being of society as a whole. c. the well
marissa [1.9K]

Answer:

c. the well-being of sellers.

Explanation:

A surplus is the amount by which the quantity supplied of a good exceeds the quantity demanded of the good.

Producer surplus is the amount a buyer is willing to pay for a good minus the cost of producing the good.

On the other hand, consumer surplus is the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it.

Hence, an export subsidy will increase producer surplus.

In conclusion, producer surplus directly measures the well-being of sellers.

4 0
2 years ago
Ranada Company manufactures and sells sportswear products. Ranada uses activity-based costing to determine the cost of the custo
kramer

Answer:

Per unit customer costs = $4.5 per unit

Explanation:

Under activity based costing cost are allocated based on per activity rate.

Customer return processing activity rate = $45 per return

Shipping activity rate = $10 per shipment

for Product 1

Total cost of shipment and return will be as follows:

Shipment = 1,200 X $10 = $12,000

Returns = 150 X $10 = $1,500

Total = $12,000 + $1,500 = $13,500

Total units = 3,000

Per unit customer costs = $13,500/3,000 units = $4.5 per unit

4 0
2 years ago
You must estimate the intrinsic value of Noe Technologies’ stock. The end-of-year free cash flow (FCF1) is expected to be $27.50
emmasim [6.3K]

Answer:

= $52.78 per share

Explanation:

<em>The value of a business can be determined using the free cash flow model. According to this model, the value of a firm is is the present value of its free cash flow discounted at the weigthed average cost of capital (WACC.)</em>

<em>The value of equity is the value of firm less value of other instruments (e.g debt and preferred stocks)</em>

<em>Value of equity = Value of the entire firm - Value of debt </em>

We can work out the the value per share using the steps below:

<em>Step 1</em>

<em>Calculate the total value of the firm</em>

Value of firm =  27.50/(0.1-0.07)

 = $916.66 million

<em>Step 2</em>

<em>Calculate the value of equity</em>

<em>Value of equity = Value of the entire firm - Value of debt</em>

= $916.66 million - $125.0 million

=791.666 million

<em>Step 3</em>

<em>Calculate the value per share</em>

Value per share = Value of equity/ units of common stock

=$791.666 million/15 million units

= $52.78 per share

3 0
2 years ago
Which of the following statements provides a summary of cash receipts and cash payments for a specific period of time such as a
AleksAgata [21]

Answer:

Option B                              

Explanation:

In simple words, cash flow statement refers to the financial statement in which an organisation depicts its sources and uses of cash for a specified period of time such as month or an year.

In this statement the inflows and outflows are categorized into three categories. Any cash flow from core business activities is grouped into operating activities section. Whereas cash flows from sale and purchase of machinery is categorized as cash flow from investing activities while transactions related to shareholders is recorded in financing activities section.

3 0
2 years ago
The marginal utility of the last unit of apples consumed is 12 and the marginal utility of the last unit of bananas consumed is
allsm [11]

Complete question:

The marginal utility of the last unit of apples consumed is 12 and the marginal utility of the last unit of bananas consumed is 8. What set of prices for apples and bananas, respectively, would be consistent with consumer equilibrium

a. $8 and $12

b. $6 and $4

c. $16 and $9

d. $4 and $6

Answer:

$6 and $4  set of prices for apples and bananas, respectively, would be consistent with consumer equilibrium.

Explanation:

Given,

The marginal utility of the last unit of apples consumed = 12

The marginal utility of the last unit of bananas consumed = 8

Now ,

To find :

The market level for apples and bananas, respectively, will be compatible with the consumer's equilibrium:

= \frac{12}{3} = $6

= \frac{8}{2} = $4

$6 and $4  set of prices for apples and bananas, respectively, would be consistent with consumer equilibrium.

6 0
2 years ago
Other questions:
  • Jake developed a study plan for his graduate record examination and completed his paper on tuesday. according to the steps in pr
    6·2 answers
  • Alton, a mid-level manager for knockaround clothing in charge of monthly inventory, often participates in quarterly meetings of
    9·1 answer
  • A company uses an activity-based costing system composed of three processes: tooling, processing, and resources. The company has
    9·1 answer
  • After being influenced by frequent advertisements, Jeremy buys a new cell phone. However, he discovers that the new cell phone d
    10·1 answer
  • How does Reagan's evidence compare to the available
    7·2 answers
  • Suppose that World Corp. signs a contract to build a lumber processing plant in Siberia. If World Corp. signs a second contract
    11·1 answer
  • "On January 1, 2019, Eagle Company borrows $100,000 cash by signing a four-year, 7% installment note. The note requires four equ
    12·1 answer
  • In some instances accounting principles require a departure from valuing inventories at cost alone. Determine the proper unit in
    14·1 answer
  • Customers around the world know Pepsi and consider it a primary "go-to" brand if they want a refreshing drink. This positioning
    8·1 answer
  • (Journal entries and financial statements for an Internal Service Fund) Pleasantville's Data Processing Fund, an Internal Servic
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!