You manage an equity fund with an expected risk premium of 11.8% and a standard deviation of 15%. The rate on Treasury bills is 6.5%. Your client chooses to invest $70,000 of her portfolio in your equity fund and $130,000 in a T-bill money market fund. What is the expected return and standard deviation of return on your client’s portfolio? (Round your answers to 2 decimal places.)
Expected return %
Standard deviation %

Answers

Answer 1

An equity fund is a type of investment fund that primarily invests in stocks or equities, aiming to generate returns for its investors.

To calculate the expected return and standard deviation of the client's portfolio, we need to use the weighted average of the returns and standard deviations of the two funds.

The expected return of the client's portfolio is:

Expected return = (weight of equity fund x expected return of equity fund) + (weight of T-bill fund x expected return of T-bill fund)

Expected return = (0.5 x 11.8%) + (0.5 x 6.5%)

Expected return = 9.15%

The standard deviation of the client's portfolio is:

Standard deviation = sqrt((weight of equity fund x (standard deviation of equity fund)^2) + (weight of T-bill fund x (standard deviation of T-bill fund)^2) + 2 x weight of equity fund x weight of T-bill fund x covariance)

Covariance = (correlation coefficient x standard deviation of equity fund x standard deviation of T-bill fund)

Correlation coefficient = 0 (since the two investments are uncorrelated)

Standard deviation = sqrt((0.5 x (15%)^2) + (0.5 x (0%)^2) + 2 x 0.5 x 0.5 x 0)

Standard deviation = sqrt(1.125%)

Standard deviation = 1.06%

Therefore, the expected return on the client's portfolio is 9.15%, and the standard deviation of the client's portfolio is 1.06%.

To know more about expected return visit:

https://brainly.com/question/30300038

#SPJ11

Answer 2

Expected return and standard deviation on the client's portfolio are 8.3% and 7% respectively. These figures have been derived by taking into account the weighted averages of the two types of investments in the portfolio - the equity fund and T-Bills.

To find the expected return and standard deviation on the portfolio, we first need to determine the weighted averages for each investment. The expected return is the sum of the risk premium and the rate on the Treasury bills weighted by the fraction of the investment in each. The standard deviation, however, is assumed to be zero for the T-bills (risk-free asset).

The expected return can be calculated as ((0.118 * $70,000) + (0.065 * $130,000)) / ($70,000 + $130,000) = 0.083 or 8.3%.

The standard deviation would be (0.15 * $70,000) / ($70,000 + $130,000) = 0.07 or 7% (because the portfolio's standard deviation is only attributed to the equity fund).

Learn more about Investment portfolio here:

https://brainly.com/question/32730634

#SPJ12


Related Questions

Bristol's Bistro, Inc, has declared a dividend of SO 94 per share for shareholders of record on Tuesday, December 3. The firm has 290,000 shares outstanding and will pay the dividend on December 28 How much cash will be needed to pay the dividend? When will the stock begin selling ex dividend? The amount of cash needed to pay the dividend is $(Round to the nearest dollar)

Answers

Bristol's Bistro, Inc will need $27,260,000 in cash to pay the dividend

The total amount of cash needed to pay the dividend can be calculated as follows:Total dividend payment = Dividend per share * Number of outstanding shares.Total dividend payment = $94 * 290,000Total dividend payment = $27,260,000Therefore, Bristol's Bistro, Inc will need $27,260,000 in cash to pay the dividend.The ex-dividend date is the first day that the stock trades without the dividend. In order to receive the dividend, an investor must own the stock on or before the record date.

Typically, the ex-dividend date is set two business days before the record date.In this case, the record date is Tuesday, December 3. Assuming that December 1 and 2 are both business days, the ex-dividend date would be Friday, November 29. This means that anyone who buys the stock on or after November 29 will not receive the dividend

Learn more about  shareholders here:https://brainly.com/question/28452798

#SPJ11

I have 3 investment portfolios with 4 types of investments: stocks, bonds, t-bills, and hard assets/real estate. I am having a hard time calculating the weighted average and figuring out for each portfolio if the asset allocation is helping it or hurting it.

Answers

To calculate the weighted average of your investment portfolios, you need to determine the percentage of each type of investment in each portfolio and multiply it by the corresponding rate of return. Then, you can add up the products to get the weighted average rate of return for each portfolio.

To determine if the asset allocation is helping or hurting each portfolio, compare the actual rate of return with the expected rate of return based on the desired asset allocation.

If the actual rate of return is higher than expected, the asset allocation is helping the portfolio. If it's lower, the allocation is hurting the portfolio.

B. To calculate the weighted average rate of return for each portfolio, follow these steps:

Determine the percentage of each type of investment in the portfolio.

Multiply each percentage by the corresponding rate of return for that investment.

Add up the products to get the weighted average rate of return for the portfolio.

For example, if Portfolio 1 has 40% stocks with a 10% rate of return, 30% bonds with a 5% rate of return, 20% t-bills with a 2% rate of return, and 10% real estate with a 7% rate of return, the calculation would be:

(0.40 x 0.10) + (0.30 x 0.05) + (0.20 x 0.02) + (0.10 x 0.07) = 0.057 or 5.7%

To determine if the asset allocation is helping or hurting the portfolio, compare the actual rate of return (5.7%) with the expected rate of return based on the desired asset allocation.

If the desired asset allocation was, for example, 50% stocks with a 10% rate of return, 20% bonds with a 5% rate of return, 20% t-bills with a 2% rate of return, and 10% real estate with a 7% rate of return, the expected rate of return would be:

(0.50 x 0.10) + (0.20 x 0.05) + (0.20 x 0.02) + (0.10 x 0.07) = 0.069 or 6.9%

Since the actual rate of return (5.7%) is lower than the expected rate of return (6.9%), the asset allocation for Portfolio 1 is hurting its performance. Repeat this process for each portfolio to determine if their asset allocations are helping or hurting their performance.

For more questions like Investment click the link below:

https://brainly.com/question/15105766

#SPJ11

assume that you enter a trade at $50 and believe that there is $10 of upside. where would you place your protective stop if you require a reward to risk ratio of 4 to 1? A. $50. B. $46. C. $47.50. D. $60

Answers


First, let's clarify the terms:1. Enter a trade: This means to initiate a position in a financial instrument, such as a stock, at a specific price.2. Believe that there: This implies having an expectation or prediction regarding the market.
3. Ratio of 4 to 1: This refers to the reward-to-risk ratio, a measure used to compare the expected returns of an investment to the potential downside risk. 4. $50: The initial entry price of the trade.



Now, let's address your question: You enter a trade at $50 and believe there is $10 of upside. This means your expected profit is $10 (target price of $60). To achieve a reward-to-risk ratio of 4 to 1, you need to determine where to place your protective stop. Step 1: Calculate the desired risk
Since the reward is $10, and the desired ratio is 4:1, divide the reward by 4 to get the risk amount.
$10 (reward) / 4 (ratio) = $2.50 (risk) Step 2: Determine the protective stop price
Subtract the risk amount from the initial entry price to find the stop price.
$50 (entry price) - $2.50 (risk) = $47.50 (protective stop price) So, you should place your protective stop at $47.50, which corresponds to option C.

For more information on expected profit see:

https://brainly.com/question/28908571

#SPJ11

To calculate the placement of the protective stop based on a reward-to-risk ratio of 4 to 1, we first need to determine our risk. If the trade entry is at $50 and the expected upside is $10, then the risk is $10 as well (since we would exit the trade if the price drops $10).

To achieve a reward-to-risk ratio of 4 to 1, we need to ensure that our potential reward is 4 times greater than our risk. Therefore, our potential reward in this scenario would be $40 ($10 of upside x 4).

To determine the placement of the protective stop, we need to subtract our risk ($10) from our entry price ($50), which gives us $40. Then, we divide this number by our reward-to-risk ratio (4), which gives us $10. Therefore, our protective stop should be placed at $40 ($50 - $10) to achieve a reward-to-risk ratio of 4 to 1.

So, the correct answer is not among the options given.

To learn more about “risk” refer to the  https://brainly.com/question/1224221

#SPJ11

consider a situation where two firms sell pure orange juice 16 ounce bottles. the juice is only good for one week. each firm independently decides how many bottles of juice to produce at the same time (without knowing how much the other firm is producing). the price they receive per bottle depends on the total amount produced by both firms. this market is best described as a: monopoly bertrand duopoly cartel cournot duopoly

Answers

The market described in this situation is a Cournot duopoly. This is because each firm is producing their output quantity simultaneously, without knowing how much the other firm is producing.

What's Cournot duopoly

In a Cournot duopoly, firms compete on the quantity of output they produce, rather than on price.

The price each firm receives per bottle depends on the total amount produced by both firms, but each firm determines its own quantity of production. This type of competition leads to a lower quantity of output and higher prices compared to perfect competition.

A monopoly is when there is only one firm in the market, a Bertrand duopoly is when firms compete on price, and a cartel is when firms collude to set prices and production levels.

Learn more about monopoly at

https://brainly.com/question/29765560

#SPJ11

A difference between notes payable and accounts payable is that:Group of answer choicesaccounts payable are usually outstanding for longer periods of time than notes payable.accounts payable have an interest component but notes payable do not.notes payable are usually for smaller amounts than accounts payable.each note payable is supported by a legal document describing details about the company's promise to repay a loan, but accounts payable usually don't have this type of documentation.

Answers

A key difference between notes payable and accounts payable is that: each note payable is supported by a legal document describing details about the company's promise to repay a loan, but accounts payable usually don't have this type of documentation.

Notes payable typically involve formal agreements, like promissory notes, which detail the terms of repayment, including interest rates and due dates. They are often used for larger, longer-term loans or borrowings from financial institutions.

On the other hand, accounts payable represent short-term liabilities that a company owes to its suppliers or creditors for goods and services purchased on credit. These liabilities usually don't have formal legal documentation like notes payable, as they are often based on standard trade credit terms and agreements.

In summary, the main difference between notes payable and accounts payable is the presence of a legal document in the case of notes payable, whereas accounts payable typically do not have such documentation.

To know more about legal document, refer here:

https://brainly.com/question/29108865#

#SPJ11

Complete question:

A difference between notes payable and accounts payable is that:

a. accounts payable are usually outstanding for longer periods of time than notes payable.

b. accounts payable have an interest component but notes payable do not.

c. notes payable are usually for smaller amounts than accounts payable.

d. each note payable is supported by a legal document describing details about the company's promise to repay a loan, but accounts payable usually don't have this type of documentation.

think about the different ways the chapter and video describe to organize an analytical report. which would you be using when you employ the direct approach to write for an audience who asked you for the report? a

Answers

In an analytical report, various organizational structures can be employed to present the findings effectively. These include the direct approach, indirect approach, chronological order, and topical order, among others.

Understanding Analytical report

When using the direct approach, you begin with the main conclusions or recommendations, followed by supporting evidence and analysis. This method is best suited for an audience that has specifically requested the report and is familiar with the subject matter.

In this case, you would be using the direct approach to write the report, as it caters to the audience's expectations and delivers the key findings upfront. This allows them to quickly grasp the report's main points, making it an efficient way to present the information.

Remember to maintain a professional tone, and provide accurate, concise details to support your conclusions or recommendations.

Learn more about Analytical report at

https://brainly.com/question/15684754

#SPJ11

How long does a 40,000 note with 4.02% simple interest
have to run to equal 41,400?

Answers

A 40,000 note with a 4.02% simple interest rate has to run for approximately 87.06% of a year to equal 41,400. To determine how long a 40,000 note with 4.02% simple interest has to run to equal 41,400, you can follow these steps:

1. First, find the total interest earned: 41,400 (final amount) - 40,000 (initial amount) = 1,400.

2. Next, calculate the annual interest: 40,000 (principal) x 0.0402 (interest rate) = 1,608.

3. Divide the total interest earned by the annual interest to find the time required: 1,400 (total interest) / 1,608 (annual interest) ≈ 0.8706.

4. Convert the decimal value to a percentage: 0.8706 x 100 ≈ 87.06%.

5. Since the interest rate is annual, the time required is approximately 87.06% of a year.

To know more about simple interest rate refer here:

https://brainly.com/question/25845758#

#SPJ11

Felton Corp. will be found in violation of the Immigration Reform and Control Act, if it does not submit all completed Form I-9s to Immigration and Naturalization Service officers for approval.TrueFalse

Answers

True. The Immigration Reform and Control Act (IRCA) requires employers to verify the identity and employment eligibility of all employees hired after November 6, 1986, by completing Form I-9. Failure to comply with the IRCA requirements may result in fines and penalties.

Employers are required to keep Form I-9s for three years after the date of hire or one year after the termination of employment, whichever is later.
Felton Corp. could be found in violation of the IRCA if it fails to submit all completed Form I-9s to Immigration and Naturalization Service (INS) officers for approval. The INS is responsible for enforcing the IRCA and has the authority to request and review employer's Form I-9s to ensure compliance.
Employers who violate the IRCA may face civil and criminal penalties, including fines, debarment from government contracts, and even imprisonment. Therefore, it is crucial for employers like Felton Corp. to comply with the IRCA requirements and ensure that all Form I-9s are completed accurately and submitted to INS officers for approval.

for more such questions on  employment .

https://brainly.com/question/27404382

#SPJ11

True. The Immigration Reform and Control Act requires employers to verify the employment eligibility of their employees by completing Form I-9 and submitting it to the Immigration and Naturalization Service for approval.

Failure to do so can result in violations and penalties.  Felton Corp. will be found in violation of the Immigration Reform and Control Act if it does not submit all completed Form I-9s to Immigration and Naturalization Service officers for approval. This act requires employers to verify the identity and employment eligibility of their employees.

Learn more about employment here:

https://brainly.com/question/17459074

#SPJ11

which of the following is not correct? a. if you live in a rural area, your auto insurance premium will likely be lower than if you live in a large city. b. in general, young drivers (under 25) and elderly drivers (over 70) have more frequent and more serious accidents. c. multiple accidents or tickets will increase insurance rates. d. the cost and number of claims you have should not affect your premium. e. your credit score can cause your premium to change.

Answers

The statement that is not correct is: d. the cost and number of claims you have should not affect your premium.


Explanation: Auto insurance premiums are calculated based on the risk factors associated with the insured. Living in a rural area (a) usually results in lower premiums because there are fewer cars, less traffic, and a lower likelihood of accidents compared to large cities. Young drivers (under 25) and elderly drivers (over 70) (b) are statistically more likely to be involved in accidents, which is why their premiums are typically higher. Multiple accidents or tickets (c) indicate a higher risk of future claims, so insurance rates will increase accordingly.


On the other hand, the cost and number of claims (d) do affect your premium, as insurers use your claim history to assess your risk level. If you have a history of frequent or high-cost claims, you are more likely to be considered a high-risk driver, and your premium will be higher.Lastly, your credit score (e) can also impact your premium, as studies have shown a correlation between credit scores and the likelihood of filing claims.

To know more about premium click here

brainly.com/question/13724529

#SPJ11

True or false: Success as a customer service worker depends on the ability to connect with customers on a personal level.

Answers

True. Success as a customer service worker largely depends on the ability to connect with customers on a personal level. This means not only listening to their concerns and addressing their needs, but also understanding their perspective and showing empathy.

Customers want to feel valued and heard, and when a customer service worker can establish a personal connection, it can make all the difference in their experience. Building rapport with customers can also lead to increased loyalty and repeat business.

In addition, connecting with customers on a personal level can help prevent and diffuse difficult situations. When a customer is upset or frustrated, they may be more willing to listen to and trust someone they feel has taken the time to understand their perspective.

However, it's important to note that connecting with customers on a personal level doesn't mean being overly familiar or intrusive. It's important to maintain professionalism and respect boundaries.
for more such questions on empathy

https://brainly.com/question/29237688

#SPJ11

3 Name four events that indicated ethnic cleansing or racial hatred in Europe and Africa in the 20th century?

Answers

The four events that indicated ethnic cleansing or racial hatred in Europe and Africa in the 20th century are Holocaust, Rwandan Genocide, Bosnian Genocide, Armenian Genocide.

1. Holocaust: The Holocaust is one of the most notorious acts of ethnic cleansing and racial hatred in Europe and Africa in the twentieth century. It was an organized campaign of genocide against Jews, Roma and Sinti, disabled people, homosexuals, political dissidents and other minority groups in Nazi-controlled Europe. Approximately six million Jews were killed in the Holocaust.

2. Rwandan Genocide: The Rwandan genocide was a genocide in 1994 against the Tutsi ethnic minority in Rwanda. It was largely carried out by the Hutu majority in the country and resulted in more than 800,000 people being killed.

3. Bosnian Genocide: The Bosnian Genocide was a campaign of ethnic cleansing and genocide against Bosnian Muslims, Croats and other non-Serbs in Bosnia and Herzegovina from 1992 to 1995. Approximately 100,000 people were killed in the Bosnian Genocide.

4. Armenian Genocide: The Armenian Genocide was a campaign of ethnic cleansing and genocide against Armenians in the Ottoman Empire during World War I. Approximately 1.5 million people were killed in the Armenian Genocide.

Know more about ethnic cleansing here

https://brainly.com/question/12766738#

#SPJ11

Suppose a stock had an initial price of $61 per share, paid a dividend of $1.40 per share during the year, and had an ending share price of $69.
Requirement 1:
Compute the percentage total return. (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)
Percentage total return: %
Requirement 2:
What was the dividend yield? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)
Dividend yield %
Requirement 3:
What was the capital gains yield? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)
Capital gains yield %

Answers

Suppose a stock had an initial price of $61 per share, paid a dividend of $1.40 per share during the year, and had an ending share price of $69.

Requirement 1: Compute the percentage total return.
Step 1: Calculate the capital gain by subtracting the initial price from the ending price.
Capital Gain = $69 - $61 = $8

Step 2: Calculate the total return by adding the capital gain and the dividend.
Total Return = Capital Gain + Dividend = $8 + $1.40 = $9.40

Step 3: Calculate the percentage total return by dividing the total return by the initial price and multiplying by 100.
Percentage Total Return = (Total Return / Initial Price) * 100 = ($9.40 / $61) * 100 = 15.41%

Percentage total return: 15.41%

Requirement 2: What was the dividend yield?
Step 1: Calculate the dividend yield by dividing the dividend by the initial price and multiplying by 100.
Dividend Yield = (Dividend / Initial Price) * 100 = ($1.40 / $61) * 100 = 2.30%

Dividend yield: 2.30%

Requirement 3: What was the capital gains yield?
Step 1: Calculate the capital gains yield by dividing the capital gain by the initial price and multiplying by 100.
Capital Gains Yield = (Capital Gain / Initial Price) * 100 = ($8 / $61) * 100 = 13.11%

Capital gains yield: 13.11%

To know more about Dividend Yield refer here

https://brainly.com/question/28044310#

#SPJ11

which element of the promotional mix is based on impersonal, paid, one-way communication about an organization or product?

Answers

Element of the promotional mix is based on impersonal, paid, one-way communication about an organization or product: Advertising. The correct option is C.

Advertising is an element of the promotional mix that focuses on impersonal, paid, one-way communication about an organization or its products. It involves the use of various media channels, such as TV, radio, print, and online platforms, to convey a message to a large audience.

The primary purpose of advertising is to inform, persuade, and remind consumers about a product or service, ultimately aiming to drive sales and brand awareness.

In contrast, public relations (a) focuses on building and maintaining a positive image for an organization, personal selling (b) involves direct face-to-face communication with potential customers to close sales, and social media (d) serves as a platform for interactive, two-way communication between an organization and its audience.

Each of these promotional mix elements has its unique role in promoting a product or organization, but advertising is the one based on impersonal, paid, one-way communication.

To know more about Advertising, refer here:

https://brainly.com/question/15346287#

#SPJ11

content loaded

which element of the promotional mix is based on impersonal, paid, one-way communication about an organization or product?

a) Public relations

b) Personal selling

c) Advertising

d) Social Media

5 pts consider a $1,000 par value bond with a 7% annual coupon. there are 20 years remaining until maturity. you have expectations that in 5 years the ytm on a 15-year bond with similar risk will be 7.5%. you plan to purchase the bond now and hold it for 5 years. your required return on this bond is 7.17%. how much would you be willing to pay for this bond today? (hint: find the expected bond value in 5 years)

Answers

You would be willing to pay $901.44 for the bond today.

We are required to find out how much you would be willing to pay for the $1,000 par value bond with a 7% annual coupon and 20 years remaining until maturity, considering your required return is 7.17% and the expected YTM on a similar 15-year bond in 5 years will be 7.5%.

In order to calculate the amount you would willing to pay, follow these steps:

1. Calculate the bond's annual coupon payment:

Coupon payment = 0.07 * $1,000 = $70

2. Calculate the present value of the coupon payments for the 5-year holding period:

PV of coupon payments = $70 * [(1 - (1 + 0.0717)^-5) / 0.0717] = $291.64

3. Calculate the expected bond value in 5 years, when the YTM is 7.5% and there are 15 years remaining until maturity:

Expected bond value = $70 * [(1 - (1 + 0.075)^-15) / 0.075] + $1,000 / (1 + 0.075)^15 = $887.91

4. Calculate the present value of the expected bond value at the end of the 5-year holding period:

PV of expected bond value = $887.91 / (1 + 0.0717)^5 = $609.80

5. Add the present value of coupon payments and the present value of the expected bond value to find the price you would be willing to pay for the bond today:

Bond price = PV of coupon payments + PV of expected bond value = $291.64 + $609.80 = $901.44

Learn more about Bond:

https://brainly.com/question/25596583

#SPJ11

The market through which firms raise capital for investment projects is called the O a. Secondary market O b. Derivatives market O c. Primary market O d. Bond Market O e. Stock market

Answers

The market through which firms raise capital for investment projects is called the primary market (option c).

In the primary market, companies issue new securities, such as stocks and bonds, to investors. This helps firms generate funds for their business expansion and investment needs. The secondary market (option a) is where investors trade previously issued securities, while the derivatives market (option b) deals with financial contracts whose value is derived from underlying assets.

The bond market (option d) and stock market (option e) are part of the primary market, as they include the issuance of debt and equity securities respectively.

For more such questions on primary market , click on:

https://brainly.com/question/17168396

#SPJ11

A proprietor of an enterprise intends converting his business into a limited liability company. He also intends to have shareholders made up of 5 members as against 6 members proposed by his wife in a discussion. He has approached you as a postgraduate student in taxation to advise him on the relevance of the number of shareholders in a limited liability company setting. Required: Advise for tax planning purposes, the relevance of numbers of shareholders. (5 marks)

Answers

In advising the proprietor of an enterprise on the relevance of the number of shareholders in a limited liability company setting, for tax planning it is important to consider tax implications, control and decision-making preferences, ease of raising capital, and legal requirements.

1. Tax implications: The number of shareholders may impact the company's tax liability. Generally, a larger number of shareholders may provide an opportunity to distribute income more efficiently and lower the overall tax burden. However, this may vary depending on the local tax regulations.

2. Control and decision-making: The number of shareholders can also impact the level of control and decision-making within the company. With a smaller number of shareholders (e.g., 5 members), the proprietor may retain more control over the company's operations and decisions. However, having more shareholders (e.g., 6 members) may lead to more diverse perspectives and shared responsibility.

3. Ease of raising capital: The number of shareholders can affect the company's ability to raise capital. A larger number of shareholders may make it easier to raise funds through the issuance of shares, while a smaller number may limit the company's access to capital.

4. Legal and regulatory requirements: The number of shareholders may be subject to legal and regulatory requirements, which may impact the company's ability to operate as a limited liability company. It is essential to review local laws and regulations to ensure compliance.

In conclusion, the proprietor should weigh the advantages and disadvantages of having 5 or 6 shareholders in the limited liability company setting. The decision should be based on the specific tax implications, control and decision-making preferences, ease of raising capital, and legal requirements in their jurisdiction.

Learn more about Limited liability company:

https://brainly.com/question/13304738

#SPJ11

20 pts Question 4 A bond has a maturity of 20 years, a coupon rate of 6% (paid annually), and a par value of $1,000. The risk-free rate is 1.25%. If you think the appropriate risk premium is 5%, what is the fair price of the bond? (Answer in dollars, let Canvas do the rounding) Question 5 20 pts The bond is in fact trading at $871. What is the risk premium on the bond according to the market? (Answer with a numerical value, such as 0.011, not 1.1%. Do not round, let Canvas do the rounding)

Answers

The present value of the bond can be calculated using the formula:

PV = (C / r) x (1 - (1 / (1 + r)^n)) + (F / (1 + r)^n)

Where:

PV = present value of the bond

C = annual coupon payment

r = discount rate (risk-free rate + risk premium)

n = number of years to maturity

F = face value (par value) of the bond

Substituting the given values, we get:

PV = (60 / 0.0625) x (1 - (1 / 1.0625^20)) + (1000 / 1.0625^20)

Therefore, the fair price of the bond is $1,029.16.

The risk premium on the bond according to the market can be calculated as follows:

Risk premium = (coupon payment / market price) - yield to maturity

Substituting the given values, we get:

Risk premium = (60 / 871) - (1.0625^20 - 1) / (2 x (1.0625^20 + 1))

Therefore, the risk premium on the bond according to the market is 6.97%.

For more questions like Bond click the link below:

https://brainly.com/question/17405470

#SPJ11

Q3 - A company has taken out a 3-year bank loan for $50,000. On the third anniversary of the loan, it is repaid with a $64,752 payment. What was the interest rate paid by the company
on this loan?
please solve Q3

Answers

The interest rate paid by the company on this loan was 9.63%

How to find the interest rate of the company?

To solve this problem, we can use the formula for the future value of a loan:

FV = PV * (1 + r)^n

where FV is the future value, PV is the present value, r is the interest rate, and n is the number of periods.

In this case, we know that the present value (PV) is $50,000, the future value (FV) is $64,752, and the number of periods (n) is 3 years. We can rearrange the formula to solve for the interest rate (r):

r = (FV / PV)^(1/n) - 1

Plugging in the numbers, we get:

r = ($64,752 / $50,000)^(1/3) - 1

r = 0.0963 or 9.63%

Therefore, the interest rate paid by the company on this loan was 9.63%.

Learn more about interest rate

brainly.com/question/13324776

#SPJ11

hich of the following are examples of the shortsightedness effect? check all that apply.during the last 45 years, the u.s. federal budget has been in deficit (annual tax revenue fell short of annual government spending) 40 times. in 40 of the past 45 years, the legislators that set the federal budget opted to incur future debts in order to finance current spending.

Answers

The shortsightedness effect refers to a situation where decision-makers prioritize short-term gains over long-term consequences.

In the provided example, the U.S. federal budget has been in deficit 40 times in the past 45 years. Legislators setting the federal budget chose to incur future debts to finance current spending. This is an example of the shortsightedness effect because the decision-makers prioritized immediate spending needs over the long-term consequences of accumulating debt.

The shortsightedness effect can also be observed in various other domains, such as personal finance, environmental policy, and health behaviors, where individuals or policymakers may prioritize short-term benefits or gains without fully considering the long-term consequences or costs of their decisions or actions.

To know more about  shortsightedness effect refer here:-

https://brainly.com/question/14970894#

#SPJ11

The shortsightedness effect describes a scenario in which decision-makers place short-term profits ahead of long-term repercussions.

In the example given, the federal budget of the United States has been in deficit 40 times in the last 45 years. Legislators who established the government budget decided to incur future debts in order to pay present spending. Because decision-makers prioritized present spending demands over the long-term repercussions of debt accumulation, this is an example of the shortsightedness effect.

Individuals or policymakers may prioritize short-term benefits or gains without fully considering the long-term consequences or costs of their decisions or actions in a variety of other domains, such as personal finance, environmental policy, and health behaviors, where the shortsightedness effect can also be observed.

To know more about the shortsightedness effect refer here:-

brainly.com/question/14970894#

#SPJ4

Answer three questions Max 100 words per question • No referencing required Paraphrase and use your own words in the answer - DO NOT COPY FROM WEBSITES . Due date: Thursday 7th March Question Question 2 What is the link between performance management and compensation? Demonstrate your answer with an example.

Answers

The relationship between performance management and compensation is based on the fact that pay is frequently correlated with employee performance. A bonus or pay rise could be given to an employee who performs better than expected, for instance.

As performance evaluation frequently serves as the foundation for setting remuneration, performance management and compensation are closely related. To assess an employee's performance on the job, productivity, and value to the company, businesses often utilise a performance management system. Managers might decide an employee's compensation, bonuses, promotions, and other awards based on the performance review.

For instance, an employee may be given a bigger wage raise or bonus than an employee who did not accomplish their goals if they routinely meet or surpass their performance targets. Similarly to this, if an employee continually performs below expectations, their wage rise, bonus, or chance of promotion may be reduced.

Learn more about performance management:

https://brainly.com/question/30144545

#SPJ4

the gini index of sweden went from 26.4% in 2004 to 27.3% in 2012. what does this tell us about the distribution of wealth throughout the country

Answers

The Gini index of Sweden increased from 26.4% in 2004 to 27.3% in 2012. This indicates that the distribution of wealth throughout the country became slightly more unequal during that time period, as a higher Gini index represents greater income inequality.

The Gini index is a measure of income inequality, where 0 represents perfect equality and 1 represents perfect inequality. In the case of Sweden, the Gini index increased from 26.4% in 2004 to 27.3% in 2012. This suggests that the distribution of wealth in Sweden became slightly more unequal during this time period. However, it is important to note that Sweden still has a relatively low Gini index compared to many other countries, indicating a relatively equal distribution of wealth overall.

Learn More about Gini index here :-

https://brainly.com/question/30456048

#SPJ11

little corporation has pretax accounting income of $100,000. little has interest on municipal bonds of $9,000. depreciation for tax purposes is $4,000 greater than depreciation for financial reporting purposes. little paid life insurance on executive officers of $5,000. warranty expense was $10,000, and warranties paid for tax purposes was $8,000. calculate taxable income.

Answers

The taxable income for Little Corporation is $98,000.

How to calculate taxable income

To do this, we'll consider the pretax accounting income, municipal bond interest, depreciation differences, life insurance expense, and warranty expenses.

Pretax accounting income:

$100,000 Interest on municipal bonds is tax-exempt, so we do not need to include the $9,000 in the taxable income calculation.

Depreciation difference:

For tax purposes, depreciation is $4,000 greater than for financial reporting purposes.

This means we need to reduce the taxable income by $4,000.

Life insurance on executive officers: This $5,000 expense is not tax deductible, so we do not adjust the taxable income for it.

Warranty expense:

The difference between the warranty expense ($10,000) and warranties paid for tax purposes ($8,000) is $2,000.

Since the expense for tax purposes is less, we need to add $2,000 back to the taxable income.

Now we can calculate the taxable income:

$100,000 (pretax accounting income) - $4,000 (depreciation difference) + $2,000 (warranty difference) = $98,000.

Learn more about taxable income at

https://brainly.com/question/15079191

#SPJ11

A ______ forecasting model attempts to establish whether an explanatory variable influences the outcome of a response variable
residual
casual

Answers

A causal forecasting model attempts to establish whether an explanatory variable influences the outcome of a response variable.

This type of model is used to determine the cause-and-effect relationship between variables, with the goal of predicting how changes in one variable will impact the other variable.

The model establishes a causal relationship between the variables by controlling for other potential influences and identifying the specific effect of the explanatory variable on the response variable.

Causal forecasting models are commonly used in various fields, including economics, marketing, and social sciences, to understand and predict the impact of interventions or policy changes.

These models can be complex and require a deep understanding of the underlying causal mechanisms, as well as careful data collection and analysis.

Some popular techniques used in causal forecasting models include regression analysis, time series analysis, and experimental design.

By using causal forecasting models, researchers and practitioners can make more accurate predictions and informed decisions based on the expected effects of specific interventions or changes.

To learn more about causal forecasting model here:

https://brainly.com/question/14127087

#SPJ11

montana company was authorized to issue 200,000 shares of common stock. the company had issued 50,000 shares of stock when it purchased 10,000 shares of treasury stock. the number of outstanding shares of common stock was: multiple choice 190,000. 60,000. 40,000. 50,000.

Answers

There were 40,000 shares of common stock that were still outstanding. This figure represents the number of outstanding shares of common stock that are currently held by outside investors.

Option C is the appropriate response.

Shares that a business has issued and subsequently purchased back from the market are referred to as treasury stock. Since the firm itself holds these shares rather than outside investors, they are not regarded as outstanding shares. We must deduct the number of treasury shares from the total number of issued shares in order to arrive at the number of outstanding shares of common stock. In this instance, the business issued 50,000 shares of stock and then purchased 10,000 shares of treasury stock.

Therefore, the number of outstanding shares of common stock would be:
Outstanding shares = Issued shares - Treasury shares
Outstanding shares = 50,000 - 10,000
Outstanding shares = 40,000

The correct answer is option c 40,000.

For more such questions on stock

https://brainly.com/question/26128641

#SPJ11


hat complimentary breakfast characteristics are typically established by a hotel’s franchise company?

Answers

Complimentary breakfast characteristics that are typically established by a hotel's franchise company may vary depending on the company's standards and policies.

However, common characteristics may include providing a variety of breakfast options, such as hot and cold items, pastries, and beverages. The breakfast may also be available at certain hours, typically in the morning. Additionally, the company may require that the breakfast be of a certain quality and served in a designated area within the hotel. A complimentary breakfast typically established by a hotel's franchise company usually includes a variety of food and beverage options, such as pastries, fruits, cereals, yogurt, and hot beverages like coffee and tea. The company sets the standard for quality, variety, and presentation to ensure consistency across all their locations.

Learn more about company here:

https://brainly.com/question/30532251

#SPJ11

Complimentary breakfast characteristics that are typically established by a hotel's franchise company may vary depending on the company's standards and policies.

However, common characteristics may include providing a variety of breakfast options, such as hot and cold items, pastries, and beverages. The breakfast may also be available at certain hours, typically in the morning.

Additionally, the company may require that the breakfast be of a certain quality and served in a designated area within the hotel. A complimentary breakfast typically established by a hotel's franchise company usually includes a variety of food and beverage options, such as pastries, fruits, cereals, yogurt, and hot beverages like coffee and tea. The company sets the standard for quality, variety, and presentation to ensure consistency across all their locations.

Learn more about company here:

brainly.com/question/30532251

#SPJ4

Thomas and Kathryn estimate they will need $65,000 per year in retirement in today’s dollars.
amount required in account at time of requirement: $1,414,657.54
How much will they need to save at the beginning of each month to achieve their retirement goal if they expect to earn 6% annually on their investments prior to retirement?
retirement in 35 years

Answers

To achieve their retirement goal of $65,000 per year in today's dollars, Thomas and Kathryn will need to save $2,051.45 per month at the beginning of each month.

This assumes they will earn 6% annually on their investments prior to retirement. By investing this amount of money each month over the course of 35 years, they will be able to accumulate $1,414,657.54. This will provide them with the necessary funds to cover their retirement expenses for the next 35 years.

Investing for retirement can be a daunting task. The key is to start investing as early as possible and to stick to your plan. Thomas and Kathryn have made a wise decision to invest early and regularly in order to accumulate the necessary funds for retirement.

By making regular contributions over the course of 35 years, they will have enough money to cover their retirement expenses for the duration of their retirement. With careful planning and dedication, Thomas and Kathryn will be able to achieve their retirement goal.

Know more about daunting task here

https://brainly.com/question/7082784#

#SPJ11

Over the past 150 years, the U.S. economy has endured a recession on average about every:
A) one to two years.
B) four to five years.
C) 10 to 15 years
D) 50 years

Answers

Over the past 150 years, the U.S. economy has endured a recession on average about every: B) four to five years. Thus, the correct answer is option B.

A recession is referred to a significant, widespread, and prolonged downturn in economic activity. Generally, recession can be calculated as:

two consecutive quarters of negative gross domestic product (GDP) growth mean recession, although more complex formulas are also used. Economists at the National Bureau of Economic Research (NBER) measure recessions by looking at nonfarm payrolls, industrial production, and retail sales, moving beyond the simpler two quarters of negative GDP measure.

Recessions are a normal part of the economic cycle, and they occur when there is a decline in economic activity for a period of time. The U.S. economy typically experiences a recession every four to five years, though the length and severity of each recession may vary. Thus, the correct answer is option B.

To learn more about recession, visit: https://brainly.com/question/1417711

#SPJ11

Airline A’s demand curve is P(Q) = 120 – 0.2Q where Q stands for the airline’s output in number of seats. Assume all flights will be fully loaded. When a uniform price is charged, the marginal revenue will be MR(Q) = 120-0.4Q. The marginal cost of operating flights in the market is MC(Q) = 0.6Q and the total cost is C(Q) = 3000 + 0.3Q2.
(a) How much is the profit-maximizing output level? How much is the maximum profit that Airline A can earn?
(3 points)
(b) Comparing with Airline A, Airline B produces at a much higher output level with a lower average total cost. Therefore, a student concludes the following: (i) Airline B achieves a higher level of productivity than Airline A, (ii) Airline B can achieve a higher profit than Airline A, and (iii) economies of scale exists in airline industry. Do you agree with the above conclusions? Why?(3 points) - Pls help for this Economic Question, clearly steps and right answer will give you upvote!-

Answers

Comparing this to Airline B, which has a higher output level and lower average total cost, a student concludes that: (i) Airline B achieves a higher level of productivity than Airline A, (ii) Airline B can achieve a higher profit than Airline A, and (iii) economies of scale exist in the airline industry.

I agree with these conclusions because:

(i) Higher output level at a lower average total cost indicates that Airline B can produce more seats per unit of input, making it more productive than Airline A.

(ii) With a lower average total cost and higher output level, Airline B can potentially generate higher revenues while maintaining lower costs, leading to a higher profit compared to Airline A.

(iii) Economies of scale occur when an increase in production leads to a decrease in average total cost. Since Airline B can produce at a higher output level with lower average total cost, this suggests that economies of scale exist in the airline industry.

Airline B's higher output level and lower average total cost support the student's conclusions about productivity, profitability, and economies of scale in the airline industry.

Know more about airline industry here:

https://brainly.com/question/30564590

#SPJ11

the kind of learning that applies to voluntary behavior is called __________. group of answer choices classical conditioning marginal learning effective based learning instrumental conditioning

Answers

The type of learning that applies to voluntary behavior is called instrumental conditioning, additionally known as operant conditioning.

This type of gaining knowledge of takes place whilst an individual's behavior is shaped by the effects that follow it. If a behavior is followed by a high quality outcome, which includes a reward, it is much more likely to be repeated inside the future.

Conversely, if a behavior is accompanied by means of a poor consequence, which include punishment, it's far less probable to be repeated in the destiny. Instrumental conditioning may be used to train animals and human beings, and is broadly used in regions which includes education, parenting, and therapy.

Learn more about instrumental conditioning:-

https://brainly.com/question/25877954

#SPJ4

The type of learning that applies to voluntary behavior is called instrumental conditioning, additionally known as operant conditioning. This type of gaining knowledge of takes place.

whilst an individual's behavior is shaped by the effects that follow it. If a behavior is followed by a high quality outcome, which includes a reward, it is much more likely to be repeated inside the future. Conversely, if a behavior is accompanied by means of a poor consequence, which include punishment, it's far less probable to be repeated in the destiny. Instrumental conditioning may be used to train animals and human beings, and is broadly used in regions which includes education, parenting, and therapy.

Learn more about instrumental conditioning here:

brainly.com/question/25877954

#SPJ11

a group of small businesses constituting a single organization in order to spread health risks and negotiate more affordable health insurance is known as:

Answers

In order to combat the rising cost of health insurance, small businesses may band together to form a larger organization that can negotiate more affordable health insurance plans. This type of organization is known as a ""health insurance cooperative"" or ""health insurance alliance.""

Health insurance cooperatives are essentially groups of small businesses that come together to create a larger pool of individuals for insurance purposes. This allows the group to spread out the health risks among a larger population, which can help to reduce the overall cost of health insurance.

By banding together, these small businesses can also leverage their collective bargaining power to negotiate better rates with insurance providers. This can result in lower premiums and better coverage options for all members of the cooperative.

Health insurance cooperatives can be especially beneficial for small businesses, which may not have the bargaining power or resources to negotiate favorable insurance rates on their own. By pooling their resources and negotiating as a group, these small businesses can level the playing field and provide their employees with access to high-quality health insurance at an affordable price.

Overall, health insurance cooperatives are a powerful tool for small businesses looking to provide their employees with access to affordable health insurance. By working together, these businesses can spread out the health risks among a larger pool of individuals and negotiate better rates with insurance providers, ultimately resulting in better health outcomes for all involved.

Click the below link, to learn more about  insurance cooperative:

https://brainly.com/question/3739748

#SPJ11

Other Questions
a circle has a radius of 5 centimeters. what is the radian meausre of the center angle coresponding to the arc length of 10 centimeters Bonjour il me faudrait les rponses des question de la photo les question sont sur le livre cleste ma plante de Thimoth de Fombele.Mercie bonne journe For every word define it, write a sentence about how you see it in everyday life, use word in sentence.Words: Mechanical Wave, Transverse Wave, Longitudinal Wave, Wave Speed Wavelength, Frequency Crest, Trough Amplitude, Compression Rarefaction A fim camed 8484 million in 2021 on a beginning book value of common cquity of $2,600 million. The fim paid no dividends and had no stock transactions during that year. It has a required return for its equity of 12%. At the end of 2021, its shares traded at a trailing PE of 15.0 .) What growth rate in future residual camnings is implied by this P/E ratio of 15.07 b) At this growth rate, what is the return on common equity forecasted for 2022? For the toolbar, press ALT F10 (PC) or ALT.PN-F10 (MSC BIU. Paragraph Open Sans... addictive substances, for which demand is inelastic, are products for which producers can pass higher costs on to consumers. clerks at mosier data systems key in thousands of insurance records each day for a variety of client firms. samples of the work of 20 clerks are gathered. ceo donna mosier carefully examines 100 records entered by each clerk and counts the number of errors. mosier wants to set control limits to include 99.73% of the random variation in the data entry process. which type of process control chart should she use? GUYS SOMEONE PLEASE HELP. i will give brainliest!!You and your friends are driving home from the cottage and you want to bring back a camping trailer your parents left there. Before leaving, you have a troubling thought. What if the hitch on your car is not strong enough to pull this trailer? Your car has a Class I hitch which is rated with a pulling strength of 2000 lbs. On the side of the trailer a sticker gives the trailer's weight as 3600 lbs. You know from your driver's manual that your car has a weight of 1800 lbs. The real challenge will be getting on to the highway. The ramp to the highway begins with a stop sign and is about 140 m long on level ground. The highway traffic travels at 100 km/h. Can you safely merge into the flow of traffic? You may assume friction effects are very small. You may need to use the appropriate technology to answer this question.The success of an airline depends heavily on its ability to provide a pleasant customer experience. One dimension of customer service on which airlines compete is on-time arrival. The tables below contains a sample of data from delayed flights showing the number of minutes each delayed flight was late for two different airlines, Company A and Company B.Company A34 59 43 30 332 42 85 30 48110 50 10 26 7052 83 78 27 7027 90 38 52 76Company B45 63 42 32 67104 45 27 38 8475 46 32 50 6441 36 33 65 64(a)Formulate the hypotheses that can be used to test for a difference between the population mean minutes late for delayed flights by these two airlines. (Let 1 = population mean minutes late for delayed Company A flights and 2 = population mean minutes late for delayed Company B flights.)H0: 1 2 < 0Ha: 1 2 = 0H0: 1 2 0Ha: 1 2 > 0H0: 1 2 0Ha: 1 2 < 0H0: 1 2 0Ha: 1 2 = 0H0: 1 2 = 0Ha: 1 2 0(b)What is the sample mean number of minutes late for delayed flights for each of these two airlines?Company A minCompany B min(c)Calculate the test statistic. (Round your answer to three decimal places.)What is the p-value? (Round your answer to four decimal places.)p-value = Using a 0.05 level of significance, what is your conclusion?Do not Reject H0. There is statistical evidence that one airline does better than the other in terms of their population mean delay time.Reject H0. There is statistical evidence that one airline does better than the other in terms of their population mean delay time. Do not reject H0. There is no statistical evidence that one airline does better than the other in terms of their population mean delay time.Reject H0. There is no statistical evidence that one airline does better than the other in terms of their population mean delay time. Find H. C. F of each set of number using long division method 80,215,245and720 a successful political party must have a dedicated core of willing a(n) routine pools multiple transactions into a single batch to update a master table field in a single operation. assume that list stores a random list of integers prior to calling method tango. how will the numbers be arranged in the list array after a call to method tango Who is more powerful, the governor or the lieutenant governor?(1) an introduction that states your argument/thesis on the question or topic, (2) a body paragraph that supports your thesis statement (reasoning and evidence go here), and (3) a concluding paragraph that sums up your entry by explaining how your evidence and reasoning leads one to accept your argument. Must be at least 250 words but no more than 350 words. what was craig vs boren A 37-year-old patient has an infectious inflammation of the dural venous sinus closest to the pituitary gland and a secondary thrombus formation. Which of the following is the most likely site of infection?A. Cavernous sinusB. Straight SinusC. Superior sagittal sinusD. Sigmoid sinus Give 5 ways to achieve personal experience. what is the significance of the circular region marked in the image (with location identified on the map)? A performance appraisal is likely to contain which two of the following types of information? Performance feedback Assessment of performance On-the-job training Job analysis Realistic job preview A 2,900-kg truck runs into the rear of a 1,000-kg car that was stationary. The truck and car are locked together after the collision and move with speed 8 m/s. Compute how much kinetic energy was "lost" in this inelastic collision. calculate the current flowing through the heater and determine how much power the heater will provide