Q: benefit results from holding a portfolio of assets rather than a single asset?
A: A portfolio is a combination of various financial instruments
Q: Which is the accounting rate of return using the average investment?
A: Summary of the relevant information as provided in the question : cost of investment = £…
Q: What is a satisfiable investment? When the present value of benefits surpasses the cost of an…
A: This question explains about the present value of benefits surpasses and the cost of an investment…
Q: Why is it important to match your funding with economic life of corresponding asset?
A: The use of assets economic life matching with funding can be an integral tool for financial…
Q: As a Businessman and Entrepreneur, which do you think is more important between Return On Asset…
A: ROA is the return on assets and ROI is the return on investment.
Q: Apply the procedure to find the true IRR, or return on invested capital, of the mixed investment?
A: The internal rate of return (IRR) is a capital budgeting metric used to gauge the benefit of…
Q: Why do most assets of the same type show positive covariances of returns with each other?
A: Covariance is a way of measuring the directional relationship between the returns on two assets and…
Q: What distinguishes a capital investment from other investments?
A: Investments: It is the method by which an investor increases his value over some time for future…
Q: Define the term internal rate of return?
A: The internal rate of return (IRR) is a capital budgeting metric used to gauge the benefit of…
Q: What is the weighted average cost of capital (WACC) and its significance?
A: Weighted average cost of capital (WACC): When a firm's weighted average cost of capital (WACC) is…
Q: What is the internal rate of return?
A: Internal rate of return is the discount rate at which present value of cash inflows equals outflows…
Q: Explain what Return on Assets (ROA) measures? Will two firms with the same EBIT have the same ROA?
A: Return on assets is a measure used by companies to analyse how effectively assets of the business…
Q: What would you choose? Other investment assets or Alternatives to fixed income and equities
A: Allocation of the investment is a much wider and troublesome task. the proper allocation may lead to…
Q: How is can CAPM, Sharpe ratio, Treynor measures and Jensen’s Alpha be used to maintain positive…
A: The performance of portfolio or investment should not evaluated only using the return of portfolio…
Q: Which one of the following is an example of conventional form of investment?
A: Conventional investment categories includes trading investment options.
Q: When considering multiple possible investments, why are rates of return preferable than monetary…
A: An investment's net profit or loss over a certain period expressed as a percentage of the…
Q: What is the significance of finding the internal rate of return?
A: IRR helps to check the viability of the project. If IRR is more than Kc than Project seems to be…
Q: Give an example of an asset that would have the most significant investment?
A: Every business organization wants to invest its idle funds into some productive assets. Investment…
Q: The net present value of an investment represents the difference between the:
A: The Answer :
Q: difference between internal rate of return and net present value?
A: Difference between internal rate of return and net present value?
Q: Discuss how the Accounting Rate of Return as an investment appraisal method is better than the Net…
A: Accounting ROR or ARR and Net Present Value(NPV) are tools that are used to make selection among…
Q: correlated
A: Covariance can be defined as a statistical tool which helps to understand the relationship that…
Q: What are the three components of the rate of return in order to earn any kind of investment?
A: Following are the three components of the rate of return in order to earn any kind of investment:…
Q: What is meant by partitioning the internal rate of return? Why is this procedure meaningful?
A: Internal rate of return is defined as the annual rate of earnings on an investment and unlike income…
Q: What role does the correlation what role does the correlation of two assets play in computation of…
A: The answer and the explanation can be seen below:
Q: Identify two disadvantages of using the payback period for comparing investments.
A:
Q: Describe the Methods for Finding Rate of Return?
A: Capital budgeting is the process a company follows to decide whether to purchase a fixed asset or…
Q: Given the following probability distribution for assets X and Y, compute the expected rate of…
A: Average Return, variance and standard deviation of a security is calculated using the below formula…
Q: Explain the blended capitalization rate and where it can be applied?
A: The rate which is a combination of the previous rate and the new rate charged on a loan is called a…
Q: Why doesn’t an estimated absolute covariance number tell the investor much about the relationship…
A: Sample Covariance means the in which the investor has not much information about the rate of return…
Q: What is the Capital Asset Pricing Model and explain the variables used to calculate the required…
A: The Capital asset pricing model is a model that is used for the calculation of the cost of equity of…
Q: explain the unique characteristics of the asset class, their associated risks and potential returns.…
A: The investments can be made using different assets basing on the risk capability and investment…
Q: The following provides information regarding Assets X and Y. Calculate the expected rate of return,…
A: Data given: Asset X Probability Return(%) 0.10 8 0.20 9 0.30 11 0.40 12 Asset Y…
Q: What would you choose? OTHER INVESTMENT ASSETS or ALTERNATIVES TO FIXED INCOME AND EQUITIES
A: Portfolio investments: Portfolio investment is the type of investment in which various types of…
Q: How can we invest in two assets with dissimilar return characteristics?
A: Diversification is one of the tactics to keep in mind while forming a portfolio. Investing all the…
Q: Explain the concept of capitalization effects?
A: Capitalization means recording an expense or cost on the assets side of the balance sheet and…
Q: How can we invest in multiple assets with dissimilar return characteristics?
A: Diversification is one of the tactics to keep in mind while forming a portfolio. Investing all the…
Q: Why is it favorable to invest in different investable assets?
A: Diversification is very important in investment to achieve the consistency.
Q: What are the three sources, the owner of a risky asset should expect to earn a return from?
A: An asset which does not provide fixed rate of return is known as risky asset. The returns provided…
Q: Describe the process to invest in two assets with similar return characteristics?
A: The investment in any asset depends upon the risk and return of the particular asset and security.…
How can we invest in two assets with similar return characteristics?
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- What role does the correlation what role does the correlation of two assets play in computation of the expected return of the two asset portfolio ?What is the significance of finding the internal rate of return?explain the unique characteristics of the asset class, their associated risks and potential returns. Foreach asset class, you should use one or two examples to support your explanation. Asset Class Characteristics Risk Potential Returns ExampleCash Products Fixed Income Equities CurrenciesDerivatives