There are two risky assets: a stock and a bond. The stock has an expected return of 13% and a standard deviation of 0.4. The bond has an expected return of 7% and a standard deviation of 0.25. The correlation between the two assets is 0.5. The riskfree rate is 5%. You invest 70% of your wealth into stock and 30% into bond. What is the Sharpe ratio of your portfolio? A sharpe ratio is not a percentage. Please submit two decimal places.
Answers
The Sharpe ratio of the portfolio can be calculated as the excess return of the portfolio divided by the portfolio's standard deviation.
In this case, the Sharpe ratio represents the risk-adjusted return of the portfolio.
To calculate the Sharpe ratio, we need to first determine the excess return of the portfolio. The excess return is the difference between the portfolio's expected return and the risk-free rate. In this case, the expected return of the stock is 13% and the expected return of the bond is 7%.
Since the portfolio is allocated 70% to the stock and 30% to the bond, we can calculate the overall expected return of the portfolio as follows:
Portfolio Expected Return = (0.7 * Stock Expected Return) + (0.3 * Bond Expected Return)
= (0.7 * 13%) + (0.3 * 7%)
= 9.4% + 2.1%
= 11.5%
The risk-free rate is given as 5%. Therefore, the excess return of the portfolio is:
Excess Return = Portfolio Expected Return - Risk-Free Rate
= 11.5% - 5%
= 6.5%
Next, we calculate the portfolio's standard deviation using the weighted standard deviation formula:
Portfolio Standard Deviation = sqrt((0.7^2 * Stock Standard Deviation^2) + (0.3^2 * Bond Standard Deviation^2) + (2 * 0.7 * 0.3 * Stock Standard Deviation * Bond Standard Deviation * Correlation))
= sqrt((0.7^2 * 0.4^2) + (0.3^2 * 0.25^2) + (2 * 0.7 * 0.3 * 0.4 * 0.25 * 0.5))
= sqrt(0.196 + 0.0225 + 0.021)
= sqrt(0.2395)
= 0.4896
Finally, we can calculate the Sharpe ratio as the excess return divided by the portfolio's standard deviation:
Sharpe Ratio = Excess Return / Portfolio Standard Deviation
= 6.5% / 0.4896
= 13.28
Therefore, the Sharpe ratio of the portfolio is 13.28, indicating the risk-adjusted return of the portfolio based on its volatility.
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Related Questions
During the year, Rajeev makes the following transfers.
$1,000 to his mayor's reelection campaign.
$21,000 to his aunt, Ava, to reimburse her for what she paid the hospital for her gallbladder operation.
$18,000 paid directly to the surgeon who performed Ava's gallbladder operation.
$22,000 to purchase a used car for his son to use at college.
Which of these transfers are subject to the Federal gift tax? (Include the total amount, and disregard the annual exclusion.)
Answers
The transfer subject to the Federal gift tax is $22,000, which is the amount used to purchase the used car for his son to use at college.
The Federal gift tax is a tax imposed on the transfer of property or assets by one individual to another without receiving full value in return. Not all transfers are subject to the gift tax, as there are exemptions and exclusions in place. In this case, the following transfers need to be considered:
$1,000 to his mayor's reelection campaign: This is considered a political contribution rather than a transfer of property or assets to an individual, so it is not subject to the Federal gift tax.
$21,000 to his aunt, Ava, to reimburse her for what she paid the hospital for her gallbladder operation: This transfer is a reimbursement of expenses and not a gift, so it is not subject to the Federal gift tax.
$18,000 paid directly to the surgeon who performed Ava's gallbladder operation: Similar to the previous transfer, this is a payment for services rendered and not a gift, so it is not subject to the Federal gift tax.
$22,000 to purchase a used car for his son to use at college: This transfer involves the transfer of property (the used car) to his son. Since it exceeds the annual exclusion limit (disregarding the annual exclusion as instructed), it is subject to the Federal gift tax.
The transfer subject to the Federal gift tax is $22,000, which represents the amount used to purchase the used car for Rajeev's son to use at college. The other transfers described in the scenario do not qualify as gifts subject to the gift tax.
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Imagine an important customer shows up at a hotel that is fully booked, and the reservation is missing. The manager must decide how to respond to the customer. At which level would this decision be made?
Answers
An significant client arriving at a fully filled hotel without a reservation would put the decision in the manager's hands.
A business manager is a manager who oversees the activities of a team of workers inside a company or department. They work to maintain the company's productivity, efficiency, and organization at all times by putting operational strategies into place, performing performance evaluations, and supervising all daily operations.
Teams can be led by managers who can give them a trustworthy purpose and direction. It supports staff in achieving their objectives and running daily operations for the business. The following measures for managing projects and possible recruits are also planned.
Thus, as per the situation given it comes under the level of manager's level to make a decision.
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Can anyone give me some tips on how to become a successful businesswoman
Answers
Dexter has recently joined an organization. His trainer, ken asks dexter to follow certain processes to complete his work faster. Dexter follows the processes without questioning ken. Which one of Aristotle's elements of good communication is being exemplified in the communication between dexter and ken?
Answers
Answer:
Ethos
Explanation:
Ethos is one of the three Aristotle's elements of good communication that is based on credibility. It explains the reason why a listener should believe what you are saying to them.
This can also come as a result of ones position and in the environment where he is communicating or because of his expertise and skills and knowledge in the subject of communication which actually convince the listeners that you are more knowledgeable.
Ken's position as Dexter's trainers makes allows his credibility to Ken.
Answer:
Ethos
Explanation:
Answered it right on edmentum
what are 2 reasons a business should have a code of ethics???
FIRST ANSWER GETS BRAINLIEST
Answers
Answer: Having good ethics should be just as important as any other business characteristic; the importance of good ethics should be seen in much the same way the business community has recognised the importance of a good company culture on the success of a business.
Explanation: I think
Prompt What is an economy?
Answers
Answer:
An economy is the large set of inter-related production and consumption activities that aid in determining how scarce resources are allocated.
1. This bank statement is most likely for what kind of account? Provide at least two pieces of evidence from the statement that explain why. (2 points)
2. Which transaction on the bank statement is most likely a paycheck? How do you know? (1 point)
3. The owner of the account wants to buy a $750 refrigerator. Explain why this would be a poor decision right now, based solely on information shown on the bank statement. (1 point)
4. The owner of the account may have already overdrawn. what evidence from the statement indicates that this may be the case? (1 point)
Answers
The bank statement is for a current account. The evidence to show that's it's a current account include:
The check depositThe pending of some checks deposited and check#509 withdrawn.The transaction on the bank statement that is most likely a paycheck is the automatic deposit of $2055.
The owner of the account cannot buy the $750 refrigerator because he has a balance of $240.
The from the statement indicates that the owner of the account may have already overdrawn is because the total withdrawals are -$330.57.
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Answer:
The guy above really helped got a 100 on this because of this guy thank you.
Explanation:
Nikita Enterprises has bonds on the market making annual payments, with eleven years to maturity, a par value of $1,000, and selling for $970. At this price, the bonds yield 7 percent. What must the coupon rate be on the bonds?
Answers
Based on the selling price, the par value and the bond yield, the coupon rate must be 6.62%.
What is the coupon rate?Use Excel to find the payment using the PMT function.
Rate = 7% = 0.07
Number of payment periods = 12 years
PV = $970 selling price
FV = $1,000 face vaue
Payment will be 66.22 which as a coupon rate is:
= 66.22 / 1,000 face value
= 6.62%
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What happens if you still have a balance on your credit card AFTER the company starts charging you interest?
A: The bank will make your interest payments for you
B: The bank will extend the 0% APR so you don't pay interest
C: The bank will offer you a 0% so they make no money off you
D: The bank will make money from the interest fees you pay
Answers
My reasoning is because banks will always make money of your interest and debt someway. This includes every bank in the world, it’s how banks can afford to stay open and hire employees.
Hope this helps have a nice day :)
an expression in sum-of-products form consists . group of answer choices of a single product term solely of an oring of product terms of multiplication and addition to create circuits solely of an anding of product terms
Answers
An expression in the sum-of-products form consists of a single product term or an ORing of product terms.
In digital logic design, an expression in sum-of-products (SOP) form represents a logical function as a combination of AND and OR gates. The SOP form is also known as the canonical form, where each term is a product of literals (variables or their complements), and the entire expression is an ORing of these product terms.
A single product term represents a conjunction of literals, and it can be seen as a minimal expression where all the variables must be true for the term to be true. On the other hand, an ORing of product terms represents a disjunction of multiple conjunctions, allowing for more flexible logic expressions.
By using a combination of AND and OR gates, circuits can be created to implement complex logical functions. The SOP form is widely used in digital design as it provides a structured and systematic representation of logic functions, allowing for easy implementation and analysis of circuits.
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3. ______ are defined as goods or services that are required for health and safety.
Answers
Occupational Health and Safety are defined as goods or services that are required for health and safety. Information standards are guidelines governing the information that must be provided to consumers when they purchase specific goods.
What is the safety of goods?A safe product is one that delivers either no risk or a minimum tolerable level of risk, taking into account the product's typical or reasonably foreseeable use and the need to maintain a high level of consumer protection.
Occupational health and safety is a multidisciplinary discipline that deals with all elements of workplace health and safety, with a heavy emphasis on preventing workplace dangers.
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Which low risk investment would you choose if you were on a strict budget?
Real Estate
Stocks
Mutual Funds
Bonds
Answers
Answer:
Bonds is the low risk investment if you were on a strict budget.
Explanation:
The analysis bonds have been examined 'safe' investments is because, for the last 30 years, interest rates have been getting down, and when interest rates decline, bond values grow.
Surely, bonds are still technically more secured than stocks. They have a cheaper conventional deviation so you can assume less volatility as well. However, if the goal you’re spending in bonds is to have a fate of your money allotted to safe investments.
Bonds. Low risk investments is what your looking for.
A whole supermarket shelf of snack food bags is marked, "Frito-Lay." This is an example of a(n)
brand.
a. co brand
b. individual
c private
d. wholesale
e. family
Answers
Select the correct answer. which question is irrelevant when setting a financial goal?a. what do you want to accomplish? b. what is the timeline of your investment? c. how varied should your portfolio be?d. what do you want to do with your returns? e. how much do you want to invest?
Answers
The question that is irrelevant when setting a financial goal is c. how varied should your portfolio be?
What are financial goals ?Financial goals generally involve a specific action or outcome that you want to achieve, such as saving a certain amount of money, paying off debt, or investing in a specific asset. The variety of your portfolio, or the mix of different types of investments that you hold, is not directly related to the specific financial goal that you are trying to achieve.
To set a financial goal, it is important to consider questions such as what you want to accomplish, what the timeline is for your goal, and what you plan to do with any returns that you may receive. It is also important to consider how much money you are willing to invest or save in order to reach your goal.
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Question 2 of 40
What does the 'P' in the acronym PEST stand for?
A. Price
B. Political
C. Promotion
O D. Positive
SUBN
Answers
Answer:
The answer would be B. Political.
Explanation:
PEST Analysis (Political, Economic, Social, and Technological) is a management method whereby an organization can assess major external factors that influence its operation in order to become more competitive in the market. As described by the acronym, those four areas are central to this model.
The 'P' in the acronym PEST stands for political. The correct option is B. Political, Economic, Social, and Technological analysis is known as PEST analysis. This kind of analysis is used to evaluate outside variables that might affect a company's profitability.
What is political in PEST analysis?The threats and weaknesses used in a SWOT analysis are found using a PESTEL analysis. Political factors include government leadership, change, and policies related to foreign trade, as well as internal political issues and trends, tax policy, and trends in regulation and deregulation.
A measurement tool called PEST Analysis is used to evaluate markets for a specific product or industry over a specific period of time. Political, Economic, Social, and Technological (PEST) factors Organizations can make better business decisions after these factors are analyzed.
Thus, the ideal selection is option B.
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A long term goal taking _____ years to achieve can be broken down into shorter term goals, each taking _______ years to achieve
A. 16;32
B. 16;8
C. 8;32
D. 8;16
Answers
Answer:
B. 16;8
Explanation:
A short-term goal is something you want to do in the near future. The near future can mean today, this week, this month, or even this year. A short-term goal is something you want to accomplish soon.A long-term goal is something you want to do further in the future. Long-term goals require time and planning. They are not something you can do this week or even this year. Long-term goals usually take 12 months or more to achieve.A traditional, physical bank with online options is a type of online bank.
Please select the best answer from the choices provided
ОТ
OF
Answers
Answer:
True
Explanation:
Online banking is banking done via the internet. A customer does not need to be physically present at the bank's buildings. If their banks facilitate transactions through the internet, then it's an online bank.
Many traditional banks have incorporated online banking in their normal operations. However, online-only banks have emerged with no walk-in facilities as with traditional banks.
2. Usually, under- or overapplied overhead is considered to be an adjustment to
a. cost of goods sold.
b. finished goods and cost of goods sold.
c. work in process.
d. finished goods.
Answers
Usually, under- or overapplied overhead is considered to be an adjustment to c. work in process.
It reflects the difference between the actual overhead costs incurred and the overhead costs that were allocated to the production process. This adjustment is necessary to ensure that the costs of production are accurately reflected in the financial statements.
Under- or overapplied overhead refers to the difference between the amount of overhead costs allocated or applied to production and the actual overhead costs incurred. This difference arises when the estimated overhead costs used for allocating overhead do not match the actual overhead costs incurred during a specific accounting period.
Typically, under- or overapplied overhead is considered an adjustment to the Work in Process (WIP) account. The WIP account represents the cost of partially completed goods that are still in the production process. Since overhead costs are a part of the overall production costs, any under- or overapplication of overhead needs to be accounted for in the WIP account.
Therefore, the correct answer is option c. work in process.
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The following presents the performance of stock and bond funds under various scenarios. The T-bill rate is 3%. Probability Scenario Boom Normal Recession 0.3 0.5 0.2 Rate of return of stock fund (%) 35 20 -6 Rate of return of bond fund (%) 7 4 15 a. Calculate the expected returns of the stock and bond funds. (2 marks) b. Calculate the standard deviations of the stock and bond funds. (2 marks) c. Calculate the correlation coefficient of the stock and bond funds. (3 marks) d. Calculate the weight in stock fund, expected return and standard deviation of the optimal risky portfolio. (6 marks) e. Calculate the Sharpe ratio for the optimal risky portfolio. (2 marks) f. Suppose David decides to invest in the optimal risky portfolio a proportion (y) of his total investment budget so that his overall portfolio will have an expected rate of return of 9%. i. Determine the proportion y. (2 marks) ii. Calculate the standard deviation of David's portfolio.
Answers
a. Expected return of stock fund = weighted average of rate of return for each scenario.
b. Standard deviation of stock fund = weighted average of squared deviations from expected return.
c. Correlation coefficient = covariance divided by product of standard deviations.
d. Weight in optimal risky portfolio = based on risk and return characteristics of each fund.
e. Sharpe ratio = excess return over risk-free rate divided by standard deviation.
f. Proportion y in optimal risky portfolio = capital allocation line equation and expected return of overall portfolio.
a. The expected return of the stock fund can be calculated by multiplying the rate of return for each scenario by its respective probability and summing them up. For the bond fund, the calculation is done in the same way.
b. The standard deviation of the stock fund can be calculated using the formula for the weighted average of squared deviations from the expected return, considering the probabilities as weights. The same calculation is done for the bond fund.
c. The correlation coefficient between the stock and bond funds can be calculated using the formula for covariance divided by the product of the standard deviations of the two funds.
d. To calculate the weight in the stock fund, expected return, and standard deviation of the optimal risky portfolio, we need to use the principles of portfolio theory. The weights can be calculated based on the risk and return characteristics of each fund.
e. The Sharpe ratio is calculated by dividing the excess return of the optimal risky portfolio over the risk-free rate by its standard deviation.
f. To determine the proportion y that David should invest in the optimal risky portfolio, we need to use the capital allocation line equation and the expected return of the overall portfolio. The standard deviation of David's portfolio can be calculated using the principles of portfolio theory and the weights of the funds in his portfolio.
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Write a paragraph explaining what kind of assessment works best for you to really be able to show what you know. (Consider standardized tests, open ended responses, essays, projects, speeches, labs). Explain how your learning style may influence your success on each kind of assessment. 100 POINTS PLZ HELP TODAY
Answers
Answer:
In my experience, essays work best for me to be able to show what I know. I feel that they are more effective than taking, say, a standardized test for example. This is because they are often multiple choice, and I find myself sometimes guessing rather than doing the intended work. In an essay, I have no option other than to type/write out what I know with little-to-no guesswork, making writing out an essay a superior option when it comes to displaying my knowledge on a topic. My preferred learning style is of the visual sort, and that means I learn best by taking notes, seeing examples, using charts and diagrams, etcetera. These skills influence my success on many different types of assessments, including essay writing, test taking, and project making. I am able to visually take notes on the topic at hand, often with examples, which, in my experience, greatly influences my success on these different types of assessments.
1. What could the twin sisters have done differently? 2. Should Hanson have targeted more than $10,000? 3. In both cases, were the financial results worth the effort? 4. What would you do differently if you were to run a crowdfunding campaign?
Answers
Twin sisters could have used analytics and other tools provided search engine and Hanson shouldn't have targeted for more because believable goal is the better goal for a business.
Additionally, analytics are used to track the visits of different people. Additionally, I would prepare the post-scaling plans and include them in the video so that the investor could assess the viability of the concept.The effort put forth to raise the cash was not worthwhile because the net amount raised was small. Other intangible benefits of this effort could include concept testing for the company from an unidentified audience, which could serve as knowledge for bettering the product or business concept. Additionally, it results in the establishment of a campaign that could be employed in the future, creating value that might extend beyond just the crowd fundraising campaign.To learn more about analytics click here
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can anyone please help me please
Answers
Answer:
1. extracurricular
2. cocurricular
3. curricular
4. curricular
5. cocurricular
Explanation:
1. Daniel doing community service by cleaning up outdoor trails is an extracurricular activity because it doesn’t have nothing to do with his academics/school.
2. Debra participating in a hospital program for nursing students is cocurricular because she is practicing techniques she learned in her nursing class.
3. Rhett taking a foreign language class at his middle school is curricular because this is a class Rhett takes at school.
4. You are correct. Ernestina taking a photography class in school is curricular because this class takes place at her high school.
5. Brant joining a student organization for future teachers is cocurricular because he is studying to be a teacher.
Dillards buys finished products and sells them for a profit to its customers. Dillards is a part of which type of market
Answers
The market consisting of wholesalers and retailers who buy products for resale purposes.
Dillards is a part the Reseller market.
What type of business is a reseller?A reseller business allows you to resell products bought from manufacturers to customers. The reseller dropship business model is affordable, making it a great option for new entrepreneurs. As a reseller, you're essentially the middleman between the manufacturer and customers.
What are resellers examples?Most resellers are retail organizations. These include grocery stores, department stores and specialty stores, such as home improvement or pet supply stores. There are many different types of retailers, from Wal-Mart to Macy's to the boutique on Main Street.
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A PLACE WHERE WEALTH IS DETERMINED BY YOUR DECISIONS AND NOT WHO YOUR
PARENTS ARE IS CALLED WHAT?
Answers
Answer:
maybe a cast system?
Explanation:
im probably wrong
How do we use information properly?.
Answers
Information aids in the avoidance of research duplication.
What is an information and how to use it properly?Data used by people to make sense of the world is defined as information. It is knowledge that has been gained or shared through study, instruction, investigation, or news, and it is shared through the act of communicating, whether verbally, nonverbally, visually, or in writing.Here are a few tips for making better use of information and thinking more efficiently:
Be quiet and attentive.Never ignore what your emotions are telling you.Never think when under duress.Never concentrate on a single point of view.Information aids in avoiding research duplication. Information is attained thought processes of users, especially scholars. Scientists, engineers, scholars, and others can use information to stay informed about current advancements in their fields and to stay current.To learn more about information refer to :
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what we called laws that prohibit monopolies and other activity that reduces competition ?
Answers
The law that prohibit monopolies and other activity that reduces competition is Antitrust laws.
What is Antitrust laws?This Act forbids any agreements, coalitions, or plots that unnecessarily obstruct domestic and international trade. This includes deals made by rival businesses to fix costs, rig bids, and divide up customers—all of which are considered felonies and subject to harsh penalties. The antitrust laws generally prohibit unauthorized mergers and business practices, leaving it to the courts to determine which ones are prohibited based on the specific facts of each case. From the era of horses and buggies to the modern digital era, courts have applied antitrust rules to evolving marketplaces.Laws against monopolies safeguard competition. The benefits of free and open competition for consumers are cheaper pricing and new, improved products. Each competing business will often attempt to draw customers in a market where competition is allowed by lowering prices while raising the caliber of their goods or services.
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I NEED SOMEONE TO EXPLAIN THIS IN A COUPLE SENTENCES!
Think about the company brands you see all the time in and around your own community. Is there a McDonalds®? A 7Eleven®? A UPS Store®? These are all very large multinational companies, so the people who are managing them and profiting off them probably live somewhere else, near the company headquarters, right?
It might surprise you to learn that those businesses in your hometown may actually be owned and operated by someone who lives down the street from you. They may be franchises, which are owned by individuals or groups who then agree to pay a royalty or fee to the larger company.
In exchange, the individuals or groups are granted the right to do business under the franchisor’s name and system.
Answers
Big companies like McDonald's, 7Eleven, and UPS Store may have franchises in your local community that are owned and operated by individuals who pay a fee to use the company's name and system.
What is a company?A company is a legal entity formed by a group of people, known as shareholders, to conduct business. It is a separate legal entity from its owners, which means that it can enter into contracts, sue or be sued, and own property in its own name.
The companies play an important role in modern economies, generating jobs, creating wealth, and providing goods and services to consumers.
The big companies like McDonald's and UPS Store can have franchises in the local regions that are taken by the people who pay a fee to use the company's name.
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3 x square minus 2 root 6 X + 2 = 0
Answers
Answer:
-0.8462
Explanation:
The most important and recommended starting point of any financial model exercise is the Select an answer: a. sales forecast b. cost of sales c. levels of inventory d. depreciation expenses
Answers
The most important and recommended starting point of any financial model exercise is A. sales forecast
The most important and recommended starting point of any financial model exercise is the sales forecast. This is because all other financial projections and decisions will be based on the expected revenue generated by the business. Without a clear understanding of the sales forecast, it is difficult to make informed decisions about cost of sales, inventory levels, and other expenses.
A sales forecast typically includes a detailed breakdown of expected sales revenue by product, service, or customer segment. This information can then be used to project expenses, such as cost of sales, marketing expenses, and overhead costs.
In addition to providing a foundation for financial projections, a sales forecast can also help identify areas of opportunity or potential challenges for the business. For example, if sales are expected to decline in a particular product or service category, the business may need to adjust its marketing or pricing strategies to maintain profitability.
Option A
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The most important and recommended starting point of any financial model exercise is the sales forecast.
When creating a financial model, the most critical starting point is the sales forecast. This is because the sales forecast forms the basis for all other projections in the model, including revenue, cost of goods sold, and operating expenses. The sales forecast provides an estimate of the amount of revenue the company is likely to generate, which in turn helps to determine the amount of resources that will be needed to support the business. Once the sales forecast has been established, other projections such as cost of sales, inventory levels, and depreciation expenses can be calculated based on historical trends, industry benchmarks, and other relevant data. Therefore, the sales forecast is the most important and recommended starting point for any financial model exercise.
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Which level of government are Planning workers most likely to work for?
A) state
B) federal
C) local
D) international
Answers
The level of government is Planning workers most likely to work for local. Thus, the correct option is (C).
A single sovereign state's lowest levels of public administration are collectively referred to as "local government" in the United States.
When the word "government" is used in this context, it explicitly alludes to a level of bureaucracy that is geographically confined and has a set of responsibilities.
A variety of essential services for residents and companies in certain areas are handled by the local government.
Therefore, the correct option is "C".
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