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

Q: Find out change in stock if closing stock is $60,000 and opening stock is $34,000?

A: According to question we are given  closing stocks =$60,000 Opening stock=$34,000 we have to…

Q: Which of the following describes the attribute of a risk neutral investor? Select one: a. An…

A: Risk neutral is a term that is utilized to portray financial backers who are harsh toward risk. The…

Q: are

A: Conservatism is a social and political philosophy which promotes traditional social institutions.The…

Q: What are some reasons why the investment strategy of a 30-year-old might differ from the investment…

A: Investments: It refers to the value of the fixed assets of an economy which is produced within a…

Q: At what point in one’s life is it safest to try a risky investment? Closer to or further from…

A: From the investment point of view, the life of an individual can be divided into four phases -…

Q: How investors handle risk is an important topic that usually only economists observe.

A: Basically, risk the executives happens when an investor or fund manager investigates and endeavors…

Q: How would the price of the bond be affected by changing the going market interest rate? (Hint:…

A: Interest rate  Interest rates are set by the interaction between the supply and demand for money in…

Q: As an investment advisor, you tell a client that an investment in a mutual fund has (over the next…

A: The investment decisions or a concept known as the capital budgeting is considered to be the most…

Q: Which of the following investment strategies involves generating a higher expected rate of return…

A: Through taking more risk the return will also increase too much or decrease to much.

Q: utilit

A: Utility function is an important concept which measures the preferences over a set of services and…

Q: Q2)    2, You invest $3,000 for three years at 12 percent.   a. What is the value of your…

A: Future value. It can be obtained using the below formula: “” is the present value…

Q: Studies have concluded that a college degree is a very good investment. Suppose that a college…

A: Earning of high school graduate = 1070000 $ Earnings of college graduate = 79 % more than earning of…

Q: based on the utility curves

A: An optimal portfolio is one which either tends to minimize your risk for a given return level or…

Q: How would you describe the relationship between a risky investment and the return on that investment…

A: Investors are two types one who loves the take risk and one who avoids risk basically they are risk…

Q: Given the following information, what is the standard deviation of the returns on a portfolio that…

A: According to the given information:

Q: As Uncertainty (Volatility) decreases with all else being equal,    A. The price of the option…

A: The variability of returns for a particular stock or market index is measured. The more changeable…

Q: Suppose you have a portfolio that has a long position in call Ce(So, T, X1) and a short position in…

A: When an investor holds long positions, it signifies that he or she has purchased and owns the stocks…

Q: Elizabeth has decided to form a portfolio by putting 30% of her money into stock 1 and 70% into…

A: In the analysis of a portfolio, to understand how much risk is actually involved in this investment,…

Q: Explain the difference between risk and uncertainty

A: RISK: Risk is defined as the future predictions of something bad happening. In human terms, it is…

Q: Should a person who is risk-averse hold a portfolio with no stock and only bonds? Explain.

A: Equity investment is volatile and a person may lose all his money in a particular stock if the…

Q: The benefit of diversification when constructing a portfolio is that it can reduce what?

A: Diversification(D) is a strategy to minimize the risk by combining variety of investments(I) within…

Q: Define the term Expected return on a risky asset?

A: The term expected return on a risky asset can be defined as a given probability distribution for the…

Q: Describe the relationship between Expected Value, Expected Utility and Certain Equivalent (at least…

A: The expected value is the anticipated value of anything that a person expects. In probability…

Q: You are a newly business owner ( around 1year) and you are able to start it up by means of having…

A: I will choose option 2.  I will add it to my capital as my equity. Because a business should have…

Q: hat is covariance, and why is it important in portfolio theory

A: Covariance is used in finance to measure the two variable's degree of movement together relative to…

Q: Calculate the value of profits if corporate tax is $200 million, dividend is $60 million and…

A: The information being given to us is as follows:- Corporate tax = $200 million Dividend = $60…

Q: Which statement about portfolio diversification is CORRECT? i) Typically, as more securities are…

A: i) Typically, as more securities are added to a portfolio, total risk would be expected to decrease…

Q: What will happen if two assets are earning the same expected return, but one is more risky than the…

A: The uncertainty that may occur in the future is referred to as risk. The minimum profit you obtain…

Q: An executive at a publishing house has just been given two stock options as a bonus. Each option…

A: In both cases, subgame perfect equilibrium is an exercise for both the options tomorrow. Hence,…

Q: A risk-averse investor will: a. Always accept a greater risk with a greater expected return b. Only…

A: Risk-averse people are those who prefer not to take any risk or want to reduce the uncertainty.

Q: INV 1 4c You have invested in a portfolio of 60% in risky assets (Portfolio R) and 40% in T-bills.…

A: Risk aversion is the propensity of individuals to lean toward results with low vulnerability to…

Q: conditions what could you

A: The BCG matrix is being designed for helping with long-term strategic planning, helping a business…

Q: The market risk premium is 8 percent and the risk-free rate is 5 percent. Which stock has the most…

A: Both Stocks have systematic risk. But Stock 2 has most unsystematic risk

Q: what happens when expected profit equal total investment

A: Investment: It can be made in order to get some returns in the future. Suppose if I invested some…

Q: Investors have different preferences with regards to the risk: they can be risk averse, risk neutral…

A: The risk averse people are those person who always prefers lower risk among the different levels of…

Q: What will happen if two assets are earning the same expected return, but one is more risky than the…

A: There is a positive correlation between risk and return (a connection in which both variables move…

Q: Define Purchase of Investment.

A: An investment is the purchase of products, the main purpose for which is to have gains. They are not…

Q: A moderately risk-averse investor has 50% of her portfolio invested in stocks and 50% in risk-free…

A: A budget imperative addresses every one of the blends of labor and products that a customer might…

Q: If the market risk decreases, while everything else stays the same, then Select one: O A. the budget…

A: If the market risk decreases, while everything else stays the same, then A) the budget line of the…

Q: Stewart will have a total wealth of $12,000 this year, if he stays healthy. Suppose Stewart has a…

A: Introduction Total wealth of Stewart is $12,000. If he remains healthy then his wealth will be…

Q: Suppose XYZ Corporation's stock price rises or falls with equal probability by $25 each month,…

A: A stock refers to a financial instrument that represents the ownership share in a firm.This allows…

Q: Elizabeth has decided to form a portfolio by putting 30% of her money into stock 1 and 70% into…

A: Expected return means expected value return on investment

Q: What are the strengths factors of Tesla Inc. in 2018?

A: Tesla, Inc. is an innovative automotive and energy solutions company based in California that was…

Q: If your utility function is the following form: U(c) = c1 + B c2, where c1 is the consumption in…

A: The above given problem is a case of intertemporal choice, where consumption is done in 2 period.…