Business, 06.11.2019 22:31, Dweath50

Greta, an elderly investor, has a degree of risk aversion of a = 3 when applied to return on wealth over a one-year horizon. she is pondering two portfolios, the s& p 500 and a hedge fund, as well as a number of one-year strategies. (all rates are annual and continuously compounded.) the s& p 500 risk premium is estimated at 5% per year, with a sd of 20%. the hedge fund risk premium is estimated at 10% with a sd of 35%. the returns on both of these portfolios in any particular year are uncorrelated with its own returns in other years. they are also uncorrelated with the returns of the other portfolio in other years. the hedge fund claims the correlation coefficient between the annual returns on the s& p 500 and the hedge fund in the same year is zero, but greta is not fully convinced by this claim. compute the estimated annual risk premiums, sds, and sharpe ratios for the two portfolios

Answers: 2

Show answers

Other questions on the subject: Business

Business, 21.06.2019 15:50, michellelirett

Aceramics manufacturer sold cups last year for $7.50 each. variable costs of manufacturing were $2.25 per unit. the company needed to sell 20,000 cups to break even. net income was $5,040. this year, the company expects the price per cup to be $9.00; variable manufacturing costs to increase 33.3%; and fixed costs to increase 10%. how many cups (rounded) does the company need to sell this year to break even?

Answers: 2

continue

Business, 22.06.2019 14:20, clairajogriggsk

Your uncle borrows $53,000 from the bank at 11 percent interest over the nine-year life of the loan. use appendix d for an approximate answer but calculate your final answer using the formula and financial calculator methods. what equal annual payments must be made to discharge the loan, plus pay the bank its required rate of interest

Answers: 1

continue

Business, 22.06.2019 20:20, wavymoney77yt

Direct materials (4.2 x $15) $ 63direct labor ($12 x 17.5) $210manufacturing overhead ($2.40 x 17.5) $42total job cost $ 315dougan, inc. allocates overhead based on a predetermined overhead rate of $2.40 per direct labor hour. employees are paid $12.00 per hour. job 24 requires 4.2 pounds of direct materials at a cost of $15.00 per pound. employees worked a total of 17.5 hours to complete the job. actual manufacturing overhead costs totaled $80,000 for the year for the company. how much is the cost of job 24?

Answers: 1

continue

Business, 22.06.2019 21:10, kayleerichards666

Acompany has two products: standard and deluxe. the company expects to produce 36,375 standard units and 62,240 deluxe units. it uses activity-based costing and has prepared the following analysis showing budgeted cost and cost driver activity for each of its three activity cost pools. budgeted activity of cost driver activity cost pool budgeted cost standard deluxe activity 1 $ 93,000 2,500 5,250 activity 2 $ 92,000 4,500 5,500 activity 3 $ 87,000 3,000 2,800 what is the overhead cost per unit for the standard units? what is the overhead cost per unit for the deluxe units? (round activity rate and cost per unit answers to 2 decimal places.)activity expected costs expected activity driver activity rate1 93,000 2 92,000 3 87,000 standard activity activity driver activity rate allocated costs1 2 3

Answers: 2

continue

Do you know the correct answer?

Greta, an elderly investor, has a degree of risk aversion of a = 3 when applied to return on wealth...