Business, 25.04.2020 00:49 leianagaming

Consider a risky portfolio. The end-of-year cash flow derived from the portfolio will be either $50,000 or $150,000, with
equal probabilities of 0.5. The alternative risldess investment in T-bills pays 5%.

at If you require a risk premium of 10%, how much will you be willing to pay for the portfolio?

b. Suppose the portfolio can be purchased for the amount you found in (a). What will the expected rate of return on the
portfolio be?

c Now suppose you require a risk premium of 15%. What is the price you will be wilﬁng to pay now?

d. Comparing your answers to (a) and (c). what do you conclude about the relationship between the required risk premium
on a portfolio and the price at which the portfolio will sell?

Answers: 2

Show answers

Other questions on the subject: Business

Business, 21.06.2019 21:00, paolaf9996

Intronix uses copy editors, computer graphics specialists, and java programmers to produce ads for magazines and the internet. the average new ad for magazines typically requires 180 hours of a copy editor's time and 135 hours of a computer graphics specialist's time, whereas ads produced for the internet require 35 hours of copy editor time, 195 hours of computer graphics time, and 60 hours of a java programmer's time. lassie food, a dog food manufacturer, has hired intronix to produce ads in the next four week. although currently it considers magazine ads 3 times more valuable than internet ads, it still wishes to have at least 2 of each produced within the next four weeks. intronix has assigned up to 3 copy editors, 4 computer graphics specialists, and 1 java programmer, each committed to work up to 70 hours per week on the project. how many of each type of ad should be produced to maximize the overall value to lassie foods

Answers: 3

continue

Business, 22.06.2019 00:50, abcdefg87

Consider each of the following cases: case accounting break-even unit price unit variable cost fixed costs depreciation 1 127,400 $ 38 $ 25 $ 711,000 ? 2 124,000 ? 41 2,500,000 $ 900,000 3 5,753 117 ? 171,000 100,000 required: (a) find the depreciation for case 1. (do not round your intermediate calculations.) (b) find the unit price for case 2. (do not round your intermediate calculations.) (c) find the unit variable cost for case 3. (do not round your intermediate calculations.)

Answers: 2

continue

Business, 22.06.2019 16:30, tadams9922

Penelope summers received certain income benefits in 2018. she received $1,400 of state unemployment insurance benefits, $2,000 from a federal unemployment trust fund and $3,700 workers’ compensation received for an occupational injury. what amount of the compensation must penelope include in her income

Answers: 1

continue

Business, 22.06.2019 17:20, iilovejohnccena1022

David burdick is the ceo of acme bubblegum, a successful public company. as one of the cofounders of the company, burdick has enjoyed speaking and writing about the success of acme bubblegum for several years. typically, he speaks at conferences or directly to the press, but recently, he has been blogging about his firm anonymously. specifically, he defended a recent advertising campaign that was unpopular among consumers and pointedly attacked one of acme bubblegum’s competitors. burdick deeply enjoys his anonymous blogging and believes that none of his readers actually know that he works for acme bubblegum. should burdick be allowed to praise his company’s performance anonymously online? should he be allowed to attack his competitors without disclosing his relationship with the company? how would you feel if the ceo of a company at which you shopped was secretly writing criticisms of his or her competition? how would you feel if you knew a writer for your favorite blog was actually closely involved in a company that the blog discussed? 1. define the ethical issue? 2. who are the primary stakeholders? 3. what are the possible alternatives? 4. how could you evaluate the ethical implications of the alternative actions (use appropriate decision rules)? 5. what action would you recommend and why?

Answers: 3

continue

You know the right answer?

Consider a risky portfolio. The end-of-year cash flow derived from the portfolio will be either $50,...