Crystal took time off after high school. During the first year, she worked full-time and moved out of

what other production activities could studios engage in if they didn't hire these mathematicians and scientists

horrorfan [7]

None because you can not do production with out having some kind of math or science

7 0

2 years ago

Your uncle holds just one stock, East Coast Bank (ECB). You agree that this stock is relatively safe, but you want to demonstrat

g100num [7]

Complete question:

Assume that your uncle holds just one stock, East Coast Bank (ECB), which he thinks has very little risk. You agree that the stock is relatively safe, but you want to demonstrate that his risk would be even lower if he were more diversified. You obtain the following returns data for West Coast Bank (WCB). Both banks have had less variability than most other stocks over the past 5 years.

Year ECB WCB

2004 40.00% 40.00%

2005 -10.00% 15.00%

2006 35.00% -5.00%

2007 -5.00% -10.00%

2008 15.00% 35.00%

a. What is the expected return and risk of each stock?

b. Measured by the standard deviation of returns, by how much would your uncle's risk have been reduced if he had held a portfolio consisting of 60% in ECB and the remainder in WCB? In other words, what is the difference between portfolio's standard deviation and weighted average of components' standard deviations? (Hint: check the example on page 11-12 on my note).

Solution:

The estimated return of the stock is the average profit.

So the average of ECB is (40-10+35-5+15)/5

= $\frac{75 percent}{5}$

= 15% expected return

WCB expected return = 40+15-5-10+35

= $\frac{75 percent}{5}$

= 15%

They've had the same planned return.

This is generally defined in the Greek letter Mu, (U) A weighted average may also be used to calculate portfolio volatility.

Standard deviation of ECB is $\sqrt{{ sum [(x-U)^2]/5}}$

so for ECB:

$(40-15)^2$ = $25^2$ =6.25%

$(-10-15)^2$ = $-35^2$ = 0.1225

$(35-15)^2$ = $20^2$ = 0.04

$(-5-15)^2$ = $-20^2$ = 0.04

$(15-15)^2$ =0

now 0.0625+0.1225+0.04+0.04+0=0.265

stdev= $\sqrt{(0.265/5)}$ = 0.23

So WCB is the same except in a different order to make things quick I'm only going to add the median again WCB=0.23

Then the 60/40 portfolio will be the "weighted average" of the returns.

portfolio returns

2004: (60%*40%)+(40%*40%) = 40%

2005: (60%*-10%)+(40%*15%) = 0%

2006: (60%*35%)+(40%*-5%) = 19%

2007: (60%*-5%)+(40%*-10%) = -7%

2008:(60%*15%)+(40%*35%) = 23%

we have an average return of (40+19-7+23)/5 = 75/5 =15%

The estimated return of all combined stocks is a better way to do so.

we knew they both had expected returns of 15% so we can say

(60%*15%)+(40%*15%)=15% so the portfolio has an expected return of 15%

Now we do the standard deviation for the whole portfolio and get

$(40-15)^2$ = $25^2$ =6.25%

$(0-15)^2$ = - $25^2$ =6.25%

$(19-15)^2$ = $4^2$ = 0.16%

$(-7-15)^2$ = $-22^2$ = -4.84%

$(23-15)^2$ = $8^2$ = 0.64%

now add them up and get 9.78%

$\sqrt{(9.78%/5)}$ = 13.98%

Therefore, the normal portfolio variance is 13.98 per cent and the predicted portfolio return is 15 per cent.

Every stock has a standard deviation of 23 per cent and an average return of 15 per cent, meaning that the fund has the same estimated return but with less standard deviation. This ensures that the same gain is less costly. It's stronger than any of these products.

5 0

2 years ago

Martina advises her tax client, Breslin Baked Goods, to disclose a matter by attaching a special form to its corporate tax retur

harina [27]

Answer: Martina should draft a memo for the files indicating that Breslin is a difficult client.

Explanation: The tax professional ethics standard states that one has to be under the rules and regulations that abides the profession, most especially the AICPA (American Institute of Certified Public Accountants). This means that for one to be ethical, the person's practice must be professional and in accordance to rules.

Because Martina has to be ethical, and also secure her client, she has to disclose the matter the way her clients wants it, but she also has to indicate that Breslin is a difficult person, so that her disclosure won't appear unprofessional, and for her license to be secured.

It will be unprofessional if Martina cannot handle a difficult clients. It is also unprofessional if Martina option becomes quiting or being sacked for not delivering a job.

7 0

2 years ago

You post that you are the best personal trainer on a social networking site. People Google your name and learn that you are an a

Brums [2.3K]

Answer:

association

Explanation:

Based on the information provided within the question it can be said that in this scenario your online face has an association. Meaning that people associate your online face to an accomplished and certified trainer with years of experience. Therefore when someone see's your face that is the first thing that is going to come to mind.

5 0

2 years ago

Honeycutt Co. is comparing two different capital structures. Plan I would result in 12,700 shares of stock and $109,250 in debt.

Ulleksa [173]

Answer:

Check the following calculations

Explanation:

All-Equity Plan:

Number of shares = 15,000

Plan I:

Number of shares = 12,700

Value of debt = $109,250

Price per share = Value of debt / (Number of shares under All-Equity Plan - Number of shares under Plan I)

Price per share = $109,250 / (15,000 - 12,700)

Price per share = $109,250 / 2,300

Price per share = $47.50

Plan II:

Number of shares = 9,800

Value of debt = $247,000

Price per share = Value of debt / (Number of shares under All-Equity Plan - Number of shares under Plan II)

Price per share = $247,000 / (15,000 - 9,800)

Price per share = $247,000 / 5,200

Price per share = $47.50

5 0

2 years ago