Statistics for Management and Economics (Book Only)
11th Edition
ISBN: 9781337296946
Author: Gerald Keller
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 7.3, Problem 87E
(a)
To determine
Calculate mean and standard deviation of the portfolio of Agnico Eagle (AEM): 25%, Bell CanadaEnterprises (BCE): 25%, Bank of Montreal (BMO: 25%, Dollarama (DOL): 25%.
(b)
To determine
Calculate mean and standard deviation of the portfolio of AEM: 30%, BCE: 30%, BMO: 20%, and DOL: 20%.
(c)
To determine
Calculate mean and standard deviation of the portfolio of AEM: 40%, BCE: 15%, BMO: 15%, and DOL: 30%.
(d)
To determine
Portfolio that the investor would choose to invest.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Carnes Cosmetics Co.'s stock price is $60, and it recently paid a $1.25 dividend. This dividend is expected to grow by 27% for the next 3 years, then grow forever at a constant rate, g; and rs = 14%. At what constant rate is the stock expected to grow after Year 3? Do not round intermediate calculations. Round your answer to two decimal places.
You are financial analyst for the XYZ company. The director has asked you to analyze two proposed capital investments, Project A and Project B. Each project has a cost of RM 10, 000, and the cost of capital for each project is 12 percent. The project s’ cash flows are as follows:
Year
Expected Net Cash Flows
Project A
Project B
0
(10,000)
(10,000)
1
6500
3500
2
3000
3500
3
3000
3500
4
1000
3500
Calculate each project’s NPV.
Which project or projects should be accepted?
1. Choose all of the correct items that you think companies would consider when choosing a MARR for a particular project:
Group of answer choices
A. Their cost of borrowing money from a bank
B. Their cost that their financial team thinks they can issue new bonds
C. The prevaling rates of return of their competitors stock
D. The relative risk of this particular project
2. Procter and Gamble reports a large number of financial metrics including ratios like Return on Equity, and Gross Margin, and many others. What are some reasons that they report these metrics? (Mark all that are correct)
Group of answer choices
A. They want to have a way of comparing their performance against their competitors .
B. They want to see if their total sales went up, but their costs went up even more so their profitability decreased
C. They want to see before COVID and after COVID financial ratios to see what impact it had on their finances
D. They want to determine if they are meeting their goals for…
Chapter 7 Solutions
Statistics for Management and Economics (Book Only)
Ch. 7.1 - Prob. 1ECh. 7.1 - Prob. 2ECh. 7.1 - Prob. 3ECh. 7.1 - Prob. 4ECh. 7.1 - Prob. 5ECh. 7.1 - Prob. 6ECh. 7.1 - Prob. 7ECh. 7.1 - Prob. 8ECh. 7.1 - Prob. 9ECh. 7.1 - Prob. 10E
Ch. 7.1 - Prob. 11ECh. 7.1 - Prob. 12ECh. 7.1 - Prob. 13ECh. 7.1 - Prob. 14ECh. 7.1 - Prob. 15ECh. 7.1 - Prob. 16ECh. 7.1 - Prob. 17ECh. 7.1 - Prob. 18ECh. 7.1 - Prob. 19ECh. 7.1 - Prob. 20ECh. 7.1 - Prob. 21ECh. 7.1 - Prob. 22ECh. 7.1 - Prob. 23ECh. 7.1 - Prob. 24ECh. 7.1 - Prob. 25ECh. 7.1 - Prob. 26ECh. 7.1 - Prob. 27ECh. 7.1 - Prob. 28ECh. 7.1 - Prob. 29ECh. 7.1 - Prob. 30ECh. 7.1 - Prob. 31ECh. 7.1 - Prob. 32ECh. 7.1 - Prob. 33ECh. 7.1 - Prob. 34ECh. 7.1 - Prob. 35ECh. 7.1 - Prob. 36ECh. 7.1 - Prob. 37ECh. 7.1 - Prob. 38ECh. 7.1 - Prob. 39ECh. 7.1 - Prob. 40ECh. 7.1 - Prob. 41ECh. 7.1 - Prob. 42ECh. 7.1 - Prob. 43ECh. 7.1 - Prob. 44ECh. 7.2 - Prob. 45ECh. 7.2 - Prob. 46ECh. 7.2 - Prob. 47ECh. 7.2 - Prob. 48ECh. 7.2 - Prob. 49ECh. 7.2 - Prob. 50ECh. 7.2 - Prob. 51ECh. 7.2 - Prob. 52ECh. 7.2 - Prob. 53ECh. 7.2 - Prob. 54ECh. 7.2 - Prob. 55ECh. 7.2 - Prob. 56ECh. 7.2 - Canadians who visit the United Sates often buy...Ch. 7.2 - Prob. 58ECh. 7.2 - Prob. 59ECh. 7.2 - Prob. 60ECh. 7.2 - Prob. 61ECh. 7.2 - Prob. 62ECh. 7.2 - Prob. 63ECh. 7.2 - Prob. 64ECh. 7.2 - Prob. 65ECh. 7.2 - Prob. 66ECh. 7.2 - Prob. 67ECh. 7.2 - Prob. 68ECh. 7.2 - Prob. 69ECh. 7.2 - Prob. 70ECh. 7.3 - Prob. 71ECh. 7.3 - Prob. 72ECh. 7.3 - Prob. 73ECh. 7.3 - Prob. 74ECh. 7.3 - Prob. 75ECh. 7.3 - Prob. 76ECh. 7.3 - Prob. 77ECh. 7.3 - Prob. 78ECh. 7.3 - Prob. 79ECh. 7.3 - Prob. 80ECh. 7.3 - Prob. 81ECh. 7.3 - Prob. 82ECh. 7.3 - Prob. 84ECh. 7.3 - Prob. 85ECh. 7.3 - Prob. 86ECh. 7.3 - Prob. 87ECh. 7.3 - Prob. 88ECh. 7.3 - Prob. 89ECh. 7.3 - Prob. 90ECh. 7.3 - Prob. 91ECh. 7.3 - Prob. 93ECh. 7.3 - Prob. 94ECh. 7.3 - Prob. 95ECh. 7.3 - Prob. 96ECh. 7.3 - Prob. 97ECh. 7.3 - Prob. 99ECh. 7.4 - Prob. 100ECh. 7.4 - Prob. 101ECh. 7.4 - Prob. 102ECh. 7.4 - Prob. 103ECh. 7.4 - Prob. 104ECh. 7.4 - Prob. 105ECh. 7.4 - Prob. 106ECh. 7.4 - Prob. 107ECh. 7.4 - Prob. 108ECh. 7.4 - Prob. 110ECh. 7.4 - Prob. 112ECh. 7.4 - Prob. 113ECh. 7.4 - Prob. 114ECh. 7.4 - Prob. 115ECh. 7.4 - Prob. 116ECh. 7.4 - Prob. 117ECh. 7.4 - Prob. 118ECh. 7.4 - Prob. 119ECh. 7.4 - Prob. 120ECh. 7.4 - Prob. 121ECh. 7.4 - Prob. 122ECh. 7.4 - Prob. 123ECh. 7.4 - Prob. 124ECh. 7.4 - Prob. 125ECh. 7.4 - Prob. 126ECh. 7.4 - Prob. 127ECh. 7.5 - Prob. 128ECh. 7.5 - Prob. 129ECh. 7.5 - Prob. 130ECh. 7.5 - Prob. 131ECh. 7.5 - Prob. 132ECh. 7.5 - Prob. 133ECh. 7.5 - Prob. 134ECh. 7.5 - Prob. 135ECh. 7.5 - Prob. 136ECh. 7.5 - Prob. 137ECh. 7.5 - Prob. 138ECh. 7.5 - Prob. 139ECh. 7.5 - Prob. 140ECh. 7.5 - Prob. 141ECh. 7.5 - Prob. 142ECh. 7.5 - Prob. 143ECh. 7.5 - Prob. 144ECh. 7 - Prob. 145CECh. 7 - Prob. 146CECh. 7 - Prob. 147CECh. 7 - Prob. 148CECh. 7 - Prob. 149CECh. 7 - Prob. 150CECh. 7 - Prob. 151CECh. 7 - Prob. 152CECh. 7 - Prob. 153CECh. 7 - Prob. 154CECh. 7 - Prob. 155CECh. 7 - Prob. 156CECh. 7 - Prob. 157CECh. 7 - Prob. 158CECh. 7 - Prob. 159CECh. 7 - Prob. 160CECh. 7 - Prob. 161CECh. 7 - Prob. 162CECh. 7 - Prob. 163CECh. 7 - Prob. 164CECh. 7 - Prob. 165CECh. 7 - Prob. 166CECh. 7 - Prob. 167CECh. 7 - Prob. 168CECh. 7 - Prob. 169CECh. 7 - Prob. 170CE
Knowledge Booster
Similar questions
- CONVEX Ltd. is a new company that was established on 1st January, 2020 to oversee the production of coronavirus vaccines for Ghana. On 1st July, 2020, CONVEX Ltd. acquired 75% shares in CONCAVE Ltd., a pharmaceutical company, to speed up the vaccine production. As a new graduate from UGBS, CONVEX Ltd. has employed you as their accountant. At a management meeting held, a number of issues were raised about how CONVEX Ltd. should deal with its transactions and investment in CONCAVE Ltd. and the need to conduct financial ratio analysis to determine the profitability and sustainability of CONCAVE Ltd. In a memo to management, provide your views on how the following issues should be addressed. Issue DAssuming you have done the financial ratio analysis and you have realized that profitability is looking good but liquidity is not impressive and needs urgent attention. What do you think could be the problem with CONCAVE Ltd. that your company needs to help them address?arrow_forwardConsider company ABC. Today it is 1st of January 2023 and ABC has just paid a dividend of £3 million. The expected earnings of ABC for the next 30 years are forecast to grow at a rate of 15% per annum. From 1st of January 2053 and onwards the earnings of ABC are expected to grow at a rate of 5%. The required rate of return of ABC is 12% per annum. The current dividend policy of ABC is such that they pay out 50% of its earnings as dividends (assume that they pay their dividends on 1st of January every year). a) Suppose that the dividend payout ratio is expected to stay constant in the future. What is the value of ABC stock? Show and explain your calculations and any assumptions you make. b) Just after the dividend payment on 1st of January 2043, ABC is planning to reduce their dividends and only pay out 40% of its earnings. What is the value of ABC under the new dividend policy? c) Provide a recommendation to the management of ABC as to whether they should increase/cut back on…arrow_forwardThe following is data for a manufacturing company:Begin Direct Materials $ 2,000 Direct Labor $ 5,000End Direct Materials 3,000 Begin Work-in-Process 4,000End Work-in-Process 6,000 Manufacturing Overhead 12,000Direct Materials Purchased 10,000 Cost of Goods Manufactured 24,000Cost Goods Sold ? End Finished Goods 9,000Gross Margin (Profit) ? Net Income ? Operating Expenses 6,000 What is the amount of Direct Materials used in production?arrow_forward
- On the advice of your uncle, you purchased 10 shares of a well-established U.S.-based corporate stock for $21.5 per share. After 1 quarter, you received $0.25 per share dividends each quarter for 2 years. At that point, the stock price had gone down in a short-term recession, so you purchased 10 more shares at $15 per share. The stock continued to pay 25¢ a share on all 20 shares. After 3 years (12 quarters), you decided to sell the stock since it had increased in market value to $24.5 per share. Make the following assumptions: (a) no commissions for the purchase or sale of the stock, (b) no government taxes on the dividends, and (c) quarterly compounding of the rate of return. What is the effective interest rate per year? The effective interest rate per year is %.arrow_forwardWhat is capital recovery? A.The income recognized from insurance proceeds received after a capital asset is lost due to a casualty such as theft or fire. B. Matching the income you make from using capital assets with the expenses representing the use of the assets producing the income. C.Using a capital asset that had been previously taken out of service, but is now in use again. D. When the cost of capital assets exceed the gross revenue in the acquisition year.arrow_forwardWhen do firms receive money from a stock sale in their firm and when do they not receive money?arrow_forward
- What does a share of stock represent?arrow_forwardHow do the shareholders who own a company choose the actual company managers?arrow_forwardA firm earns $60 billion in profits and pays $45 billion in dividends for the year. The firm has 3 billion shares of preferred stock and 9 billion shares of common stock. The preferred stock is guaranteed a dividend of $5.00 per year. How much will they pay in dividends to the preferred stockholders?arrow_forward
- You are working as an investment consultant in a firm. You have been provided data for the past 7 years in the Table 4 as follows: Table 4: Investment Data Yr. Investment (Rs. Millions) Returns (Rs. Millions) 1 185 17 2 128 37 3 75 63 4 98 54 5 155 36 6 63 72 7 112 36 Assume your client plans to investment 30 million rupees. Based on this data will you recommend your client to invest. Why or why not? Your recommendations must be supported by complete workings including model(s), relationships between variables (correlations, coefficient of determinations) and graphical visualizations (such as scatter charts).arrow_forwardECONOMICS At the end of 2011 Home Depot's total capitalization amounted to $29,031 million. In 2012 debt investors received interest income of $648 million. Net income to shareholders was $4,487 million. (Assume a tax rate of 35%.) Calculate the economic value added assuming its cost of capital is 10%. (Do not round intermediate calculations. Give your answer in millions rounded to 2 decimal places.)arrow_forward33 TB MC Qu. 12-82 A stock had annual returns of... A stock had annual returns of 5.5 percent, -12 percent, and 15.5 percent for the past thr of returns for this stock? 56.65% 6.94% 1.94%arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics 2eEconomicsISBN:9781947172364Author:Steven A. Greenlaw; David ShapiroPublisher:OpenStax
Principles of Economics 2e
Economics
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:OpenStax