dynamic study modules chapter 10

A company has established that the relationship between the sales price for one of its products and the quanlity sokld per month is approximalely p=75-0. 1D (D is the demand or quantity sold per month and p is the price in dollars). The fixed cost is $1,000 per month and the variable cost is $30 per unit produced. a. What is the maximum profit per month for this product? b. What is the range of profitable demand during a month? a. The maximum profit per month for this product is $. (Round to the nearest dollar.) b. The range of profitable demand during a month is from units to units. (Round up the lower limit and down the upper limit to the nearest whole number.)

Given the following information, what is the standard deviation of the returns on a portfolio that is invested 35 percent in both Stocks A and C, and 30 percent in Stock B? (see attached chart)

Optimal Portfolio: Mean-Variance OptimizationIf you are a portfolio manager who predicted that the tension in Ukraine might spiral into a global economic problem back in December 2021. She decided to construct a portfolio that, she think, would outperform in a war scenario, or in a heightened war risk scenario. Please use the following ETFs:IAU: iShares Gold Trust ETFVDE: Vanguard Energy ETFXLB: Materials Sector SPDR ETFDBC: Invesco DB Commodity Index Tracking FundCQQQ: China Technology Index ETFConstraints:i. Use all ETF products. (Weight of each ETF>= 2% )ii. No ETF is to have more than 40% weight in portfolioObjective: Maximize Expected Return, Minimize volatility, ie. MaximizeSharpe RatioStep 1: Collect historical price/return data for the ETFs over Jan-2018 to Dec-21 period.Step 2: Assume the Average Historical Return is the Expected Return for each asset (strong assumption) and Historical Volatility is the Expected Volatility (strong assumption).Step 3: Present the var-cov…

BNQ12.2 Case: Suppose an Investor is concerned about a Business Choice in which there are 3 prospects the Probabilities and Returns are given below: Probability 0.4 0.3 0.3 Return $100 30 -30 Question: What is the Expected Value of the Uncertain Investment?

You plan to invest $1,000 in a corporate bond fund or in a common stock fund. The following table represents the annual return (per $1,000) of each of these investments under various economic conditions and the probability that each of those economic conditions will occur. Compute the expected return for the corporate bond and for the common stock fund. Show your calculations on excel for expected returns.  Compute the standard deviation for the corporate bond fund and for the common stock fund.  Would you invest in the corporate bond fund or the common stock fund? Explain.  If  choose to invest in the common stock fund and in (c), what do you think about the possibility of losing $999 of every $1,000 invested if there is depression. Explain.

QUESTION 2 Elizabeth has decided to form a portfolio by putting 30% of her money into stock 1 and 70% into stock 2. She assumes that the expected returns will be 10% and 18%, respectively, and that the standard deviations will be 15% and 24%, respectively. ​ ​  Describe what happens to the standard deviation of the portfolio returns when the coefficient of correlation ρ decreases. The standard deviation of the portfolio returns decreases as the coefficient of correlation decreases. The standard deviation of the portfolio returns increases as the coefficient of correlation increases. The standard deviation of the portfolio returns decreases as the coefficient of correlation increases. The standard deviation of the portfolio returns increases as the coefficient of correlation decreases.

True or False: Increasing the number of stocks in a portfolio reduces firm-specific risk. TrueFalseConsider two stock portfolios. Portfolio A consists of 20 different stocks from firms in different industries. Portfolio B consists of four different stocks, also from firms in different industries. The return on Portfolio A is likely to be volatile than that of Portfolio B.Suppose a stock analyst recommends buying stock in the following companies:Company  IndustryToyonda AutomotiveSaalvo AutomotiveGMW AutomotiveHonsubishi AutomotiveShexxon Oil and gasMobron Oil and gasAiring AircraftBoebus AircraftGoohoo TechnologyPherk PharmaceuticalEach of the following portfolios contains four of the stock picks. Which portfolio is the least diversified? Pherk, Airing, Goohoo, ShexxonToyonda, Honsubishi, Boebus, AiringToyonda, Saalvo, GMW, HonsubishiBoebus, Airing, Shexxon, Mobron

Is co-variance a measure of relative risk, or absolute risk? A relative risk, because it is linked with the performance(s) other asset(s). B absolute risk, because it is not linked with the performance(s) other asset(s). relative risk, because it measures the co-movement of two assets. absolute risk, though it measures the co-movement of two assets.

Suppose one uses the single-index model to estimate characteristics of securities.Which of the following statements is correct? (a)The covariances between securities are the same as in the data. (b)The variance of a portfolio is the same as in the data. (c)The expected return and the variance of a security are the same as in the data. (d)The expected return,variance and covariances of a security are the same as in the da

You are at a casino and there are three slot machines you can use to bet on. You must have a return of .5% of higher on what you are betting. Below is the expected returns for each slot machine under various scenarios. What combination of machines do you play to maximize your average return? Decision Variables Data Slot 1 100.0% Monday Tuesday Wednesda Average Slot 2 0.0% Slot #1 8% 4% 5% 5.667% Slot 3 0.0% Slot #2 2% -3% 3% 0.667% Slot #3 6% -2% 4% 2.667% Objective 5.7% Constraints 0.08 >= 0.5% 0.04 >= 0.5% 0.05 >= 0.5% 100.0% .: 100%

Please show how to solve this in excel for 1 - 6 below Consider an investment for which the expected returns are normally distributed with an expected return of 11% and an annual standard deviation (SD) of 12%. What is the probability that during a given year an investor would earn a return that is:1. greater than -1%?2. lower than -1%3. lower than -13%4. greater than 11%?5. greater than 23%?6. greater than 35%?

What is the expected return from an investment if there is a 20 percent chance of a 4 percent return, a 40 percent chance of a 8 percent return, and a 40 percent chance of a 12 percent return

WITH SOLUTION PLS

A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term bond fund, and the third is a money market fund that provides a safe return of 8%. The characteristics of the risky funds are as follows: Standard Deviation Expected Return 23% Stock fund (S) 29% Bond fund (B) 14 17 The correlation between the fund returns is 0.12. a-1. What are the investment proportions in the minimum-variance portfolio of the two risky funds? (Do not round intermediate calculations. Enter your answers as decimals rounded to 4 places.) Portfolio invested in the stock Portfolio invested in the bond a-2. What are the expected value and standard deviation of the minimum-variance portfolio rate of return? (Do not round intermediate calculations. Enter your answers as decimals rounded to 4 places.) Rate of Return Expected return Standard deviation

Please help me fix c. Thanks!

Suppose an investor is concerned about a business choice in which there are three projects, the probability and returns are given below. Probability Return   0.4 $100   0.4 40           The expected value of the uncertain investment is $ ----------- (round off to the nearest dollar.

A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term bond fund, and the third is a money market fund that provides a safe return of 8%. The characteristics of the risky funds are as follows: Expected Return Standard Deviation Stock fund (S) 20% 30% Bond fund (B) 12 15 The correlation between the fund returns is 0.10. a-1. What are the investment proportions in the minimum - variance portfolio of the two risky funds. (Do not round intermediate calculations. Enter your answers as decimals rounded to 4 places.) Portfolio invested in the stock Portfolio invested in the bond a-2. What are the expected value and standard deviation of the minimum variance portfolio rate of return? (Do not round intermediate calculations. Enter your answers as percentage rounded to 2 decimals.) Expected return % Standard deviation %

K An investment counselor calls with a hot stock tip. He believes that if the economy remains strong, the investment will result in a profit of $30,000. If the economy grows at a moderate pace, the investment will result in a profit of $10,000. However, if the economy goes into recession, the investment will result in a loss of $30,000. You contact an economist who believes there is a 30% probability the economy will remain strong, a 60% probability the economy will grow at a moderate pace, and a 10% probability the economy will slip into recession What is the expected profit from this investment? The expected profit is $ (Type an integer or a decimal.)

Consider an investment that pays off $700 or $1,600 per $1,000 invested with equal probability. Suppose you have $1,000 but are willing to borrow to increase your expected return. What would happen to the expected value and standard deviation of the investment if you borrowed an additional $1,000 and invested a total of $2,000? What if you borrowed $2,000 to invest a total of $3,000? Instructions: Fill in the table below to answer the questions above. Enter your responses as whole numbers and enter percentage values as percentages not decimals (.e., 20% not 0.20). Enter a negative sign (-) to indicate a negative number if necessary. Invest $1,000 Invest $2,000 Invest $3,000 Expected Value Percent Increase Standard Deviation 1150 S 28 % $ 8 % $ Expected Return N/A Doubled Tripled : #

Two stocks are available. The corresponding expectedrates of return are r¯1 and r¯2; the corresponding variances and covariances areσ12, σ22, and σ12. What percentages of total investment should be invested ineach of the two stocks to minimize the total variance of the rate of return ofthe resulting portfolio? What is the mean rate of return of this portfolio?

The return on stock A is 13 if the economy is good and 01 if the economy is bad. The return on stock B is .09 ifr the economy is good and.05 if it is bad. The probability of a good economy is 50% and the probability of a bad economy is also 50%. Find the standard deviation for a portfolio invested 75% in A and 25% in B. O.04 O.05 O.06 O.07

#7 What is the expected value Sell software on own? Decision alternative Sell Company Form Joint Venture Success (0.24) 2337 Moderate Success (0.4) 2337 Failure (0.36) 2337 Success (0.24) 2500 Moderate Success (0.4) 2794 Sell Software on own Failure (0.36) 1000 Submit Answer format: Number: Round to: 0 decimal places. Success (0.24) 5000 Moderate Success (0.4) 3500 Failure (0.36) -868 unanswered not_submitted Attempts Remaining: 2

You decide to invest in a portfolio consisting of 21 percent Stock X, 48 percent Stock Y, and the remainder in Stock Z. Based on the following information, what is the standard deviation of your portfolio? State of Economy Normal Boom Probability of State of Economy .84 .16 Return if Stat Stock X Stock Y 10.20% 3.60% 17.50% 25.50%

An investor allocates $30,000 and $50,000 to two assets (A1 and A2). These assets generate 5% and -4.5% rate of returns, respectively. She allocates the remaining 50% of her portfolio to an asset (A3), which provides 4.5% rate of return. Calculate the portfolio's rate of return.

BN10.2 Case: Jennifer is willing to Pay $300 to Insure against the Theft of a $8,000 Necklace. The Probability of Theft is 4%. Question: What is Jennifer's Risk Tolerance?

QUESTION 1 Elizabeth has decided to form a portfolio by putting 30% of her money into stock 1 and 70% into stock 2. She assumes that the expected returns will be 10% and 18%, respectively, and that the standard deviations will be 15% and 24%, respectively. ​ ​ Compute the standard deviation of the returns on the portfolio assuming that the two stocks' returns are uncorrelated. 17.4%. 27.4%. 7.4%. 11.4%. QUESTION 2 Elizabeth has decided to form a portfolio by putting 30% of her money into stock 1 and 70% into stock 2. She assumes that the expected returns will be 10% and 18%, respectively, and that the standard deviations will be 15% and 24%, respectively. ​ ​  Describe what happens to the standard deviation of the portfolio returns when the coefficient of correlation ρ decreases. The standard deviation of the portfolio returns decreases as the coefficient of correlation decreases. The standard deviation of the portfolio returns increases as the coefficient…

Questions 18 through 20 refer to the following information: Shawn's consumption is subject to risk. With probability 0.75 he will enjoy 10000 in consumption, but with probability 0.25 he will have only 3600. His utility function for consumption is given by v(c) = vc. Question 18 What is the expected value of Shawn's consumption? Question 19 What is his expected utility?

If share prices appear to follow a random walk:     selecting shares for portfolios is irrelevant.     investment analysts are unimportant.     successive share price changes are unpredictable.     it is impossible to know when to buy shares.