Why do most assets of the same type show positive covariances of returns with each other?

Q: How can the Present-Worth Comparison be done?

A: The present worth method of comparison will diminish the cash flows of every choice to time zero by…

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: What does a failed net-investment test indicate?

A: Answer: Net investment test: The company will not overdraw at any stage on its return, and is thus…

Q: Which are the Methods for Finding Rate of Return?

A: A Rate of Return (ROR) is the gain or loss of an investment over a certain period of time. When the…

Q: What are the advantages of balance sheet?

A: Financial Statement:   A financial statement is the complete record of financial transactions that…

Q: Why are the net present value and the internal rate of return models superior to the payback period…

A: The net present value and internal rate of return techniques are superior to the payback method…

Q: Return on Assets, or ROA, can be expressed as the product of two ratios.  Which two?

A: Return on Assets: It refers to the ratio that measures the profitability of the company with respect…

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: do liquid assets frequently have lower rates of return than fixed assets?

A: Liquid assets are the cash or cash equivalents which can be drained out frequently whereas fixed…

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: What is a capitalization rate? What are the different ways of arriving at this rate for an…

A: Capitalization rate: Capitalization rate is the projected rate of return percentage that a property…

Q: difference between internal rate of return and net present value?

A: Difference between internal rate of return and net present value?

Q: What are the advantages of matching the maturities of assets and liabilities? What are the…

A: Matching the maturities of assets and liabilities refers to matching the similar category of assets…

Q: Which different terms are used to refer to rate of return?

A: Rate of return is the return that is expected by the investors from the investment made. It is…

Q: How would you characterize the correlations of returns of the two assets making up each of the two…

A: Portfolio can be defined as an investment which consists of multiple stocks. The objective of an…

Q: What information would be required to compute the risk-asset ratio under Basle I?

A: The risk asset ratio (RAR) measures the amount of a bank's total regulatory capital in relation to…

Q: correlated

A: Covariance can be defined as a statistical tool which helps to understand the relationship that…

Q: How do you turn an income statement int a forecasted return? And how is it helpful?

A: Return means earn additional on invested amount. Return is a positive factor in every investment.…

Q: What does the rate of return on total assets measure, and how is it calculated?

A:

Q: How do economies of scale and lumpy assets affect financialforecasting?

A: Economies of scale are cost advantages reaped by companies when production becomes efficient.…

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: The difference between the expected return and the actual return is referred to as the unexpected…

A: The excess amount over invested value that an investor estimates to realize over horizon of…

Q: Explain an example how to calculate rate of return on total assets.

A:

Q: Explain the risk-return trade-off for liquid assets.

A: Risk return trade off tell relationship between the risk and return.

Q: What are the different terms used to refer to the rate of return?

A: Rate of return is an expected profit on an investment by a investor. It is a rate at which investor…

Q: How can we invest in two assets with similar return characteristics?

A: An asset is something that provides benefits in the future to its owner. There are two types of…

Q: How should changes in the estimated unguaranteedresidual value be handled by the lessor?

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: Why does net working capital appear with both negative andpositive values?

A: Working capital also known as net working capital is nothing but the difference between the current…

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: profits and losses equally

A: Correct Answer :- B Peter  P170,000. And  john P90000

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: is CAPM, Sharpe ratio, Treynor measures and Jensen’s Alpha used to Evalua

A: Step 1   Portfolio management involves trading between risk and return. Most novice investors make…

Q: What is the relationship between a discount rate (or IRR) and a capitalization rate? What causes…

A: Introduction: The discount rate is nothing but a rate that reduces potential cash flows in order to…

Q: What do the Asset management ratios measure?

A: Asset management (turn over) ratios compare an organization's assets with its turnover. Asset…

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: 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.…