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FinnZ [79.3K]
1 year ago
14

Suppose you have a two-stock portfolio consisting of Apple and Tesla stock. The portfolio weight of Apple is 25% and the rest is

Tesla. The volatility of annual returns is 35% for Apple and 60% for Tesla. The correlation coefficient between the two stocks' returns is 0.22. What's the volatility of your portfolio?
Business
1 answer:
iren [92.7K]1 year ago
4 0

Answer:

Standard deviation = 47.69% (Approx)

Explanation:

Given:

Portfolio of Apple stock w1 = 25% = 0.25

Portfolio of Tesla stock w2 = 75% = 0.75

Standard deviation return Apple σ1 = 35% = 0.35

Standard deviation return Tesla σ2 = 60% = 0.60

Correlation coefficient ρ12 = 0.22

Find:

Standard deviation

Computation:

Standard deviation = √w1²σ1² + w2²σ2² + 2w1σ1w2σ2ρ12

Standard deviation = 0.4769

Standard deviation = 47.69% (Approx)

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A country's economic data indicates that there has been a substantial reduction in the financial capital available to private se
NeTakaya

Answer:

D. especially large and sustained government borrowing

Explanation:

When a government spends more than it collects in taxes, it runs a budget deficit. When the government starts borrowing large sums too much, it can substantially facilitate the reduction in the financial capital available to private sector firms, as well as lead to trade uncertainties and even financial crises.

8 0
2 years ago
When the first Pizza Hut opened its doors back in 1958, it offered consumers one style of pizza: its Original Thin Crust Pizza.
slega [8]

Answer:

<u>Monopolist competition</u>.

Explanation:

The market structure of monopolistic competition occurs when there are several companies offering similar products, which even though substitute products cannot be considered perfect substitutes. Monopolistic competition is characterized when in the market there are many sellers competing for a higher market position of some product or sector. This type of monopolistic competition is characterized by free entry to other companies, which makes it increasingly competitive in the pursuit of customer preference.

5 0
2 years ago
Since we use GDP to determine a nation’s health, we can only add the market value of the goods and services produced in the Unit
IrinaVladis [17]

Answer:

a. Shampoo is bought and used by a hair stylist in the mall. - F

It is a final product bought by the final consumer (the hair sytlist). It is part of GDP.

b. A family buys some finger paint for their child to use. - F

It is a final product bought by the final consumer (the family). It is part of GDP.

c. A person buys a tire to replace to flat one on their car. - F

It is a final product bought by the final consumer (the person who will replace the flat tire). It is part of GDP.

d. A hotel chain buys a box of pens. - F

It is a final product bought by the final consumer (the hotel). It is part of GDP.

e. Flour is bought and used to bake a cake to be sold at a bakerySomeone buys a steak to grill at home. - I

It is an intermediate product, because the flour will be made into cakes, that will then be sold, taking into account the value of the flour itself. It is not part of GDP.

f. An accounting firm buys calculators for its accountants. - F

It is a final product bought by the final consumer (the firm). It is part of GDP.

g. A person buys shampoo to use at home. - F

It is a final product bought by the final consumer (the person). It is part of GDP.

h. Flour is bought and used to bake a cake for a birthday. - F

It is final good because the flour will be made into a birthday cake, but the cake will be conumed at home. If the birthday cake is later sold, then, the flour is an intermediate good.

i. A student buys a pack of pens to do their homework. - F

It is a final product bought by the final consumer (the student). It is part of GDP.

j. A restaurant prepares a steak for its customers. - F

The steak is a final product, it will be consumed by customers for a value that the restaurant has set. This value is part of GDP.

k. A factory buys tires to place on their cars. -I

The tires are intermediate goods because they will be put in cars that they factory will later sell. The tires are not part of GDP.

l. An artist buys paints for a painting, with the intention of keeping it. - F

The painting is a final good because they customer has bought it to keep it a home. It is part of GDP.

m. A calculator is bought and used for mathematics homework. - F

It is a final product bought by the final consumer (the person doing math work). It is part of GDP.

n. An artist buys paints for a landscape painting, with the intention of selling it. - I

The paints are intermediate because their value will be put into the making of the landscape painting, which will be sold for a price that will take into account the cost of the paints. The paints are not part of GDP.

7 0
2 years ago
The mean household income in a country in a recent year was about ​$77 comma 044 and the standard deviation was about ​$84 comma
rusak2 [61]

Answer:

a) Income of $272,428 or more would be top 1%.

b) Skewed right

c) Not always normally distributed

Explanation:

We are given the following information in the question:

Mean, μ = $77,044

Standard Deviation, σ = $84,000

Median = $58,423

a) We follow a normal mode

Formula:

z_{score} = \displaystyle\frac{x-\mu}{\sigma}

We have to find the value of x such that the probability is 0.01

P(X > x)  

P( X > x) = P( z > \displaystyle\frac{x - 77044}{84000})=0.03  

= 1 -P( z \leq \displaystyle\frac{x - 77044}{84000})=0.01  

=P( z \leq \displaystyle\frac{x - 77044}{84000})=0.99  

Calculation the value from standard normal z table, we have,  

\displaystyle\frac{x - 77044}{84000} = 2.326\\\\x = 272428

Thus, income of $272,428 or more would be top 1%.

b) We should not be confident as the median is not equal to the mean. Hence, it is not a normal distribution. It was just an assumption. Since the mean is greater than the median the distribution of income is skewed towards right.

c) Normal model not be a good one for​ incomes because the median may not always e equal to the mean and hence, they do not follow a normal distribution.

8 0
1 year ago
If the total costs of producing 1,500 units of output is $13,500 and this output sold to consumers for a total of $18,000, then
garri49 [273]

Answer:

$4500

Explanation:

The Economic profit is the difference between the total revenue and the explicit and implicit cost.

Hence,

Economic profit = (Total revenue - explicit cost - implicit cost)

Explicit cost =$13500

Total revenue = $18,000

Since, implicit cost isn't given, implicit cost will be taken as zero

Hence,

Economic profit = ($18,000 - $13,500)

Economic profit = $4,500

4 0
1 year ago
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