(Security market line) You are considering the construction of a portfolio comprised of equal investments in each of four different stocks. The betas for each stock are found below:
|
Asset |
Beta |
||
|
A |
2.40 |
||
|
B |
0.95 |
||
|
C |
0.55 |
||
|
D |
−1.40 |
||
a. What is the portfolio beta for your proposed investment portfolio?
b. How would a 25 percent increase in the expected return on the market impact the expected return of your portfolio?
c. How would a 25 percent decrease in the expected return on the market impact the expected return on each asset?
d. If you are interested in decreasing the beta of your portfolio by changing your portfolio allocation in two stocks, which stock would you decrease and which would you increase? Why?
a. The portfolio beta for your proposed investment portfolio is
nothing.
(Round to three decimal places.)b. A 25% increase in the expected return on the market will cause the expected return of your portfolio to
▼
increase
decrease
by
nothing%.
(Select from the drop-down menu and round the answer to two decimal places.)
c. A 25% decrease in the expected return on the market will have the following impact on the expected return on each asset:
Asset A would
▼
by
nothing%.
(Select from the drop-down menu and round the answer to two decimal places.)Asset B would
▼
increase
decrease
by
nothing%.
(Select from the drop-down menu and round the answer to two decimal places.)Asset C would
▼
decrease
increase
by
nothing%.
(Select from the drop-down menu and round the answer to two decimal places.)Asset D would
▼
increase
decrease
by
nothing%.
(Select from the drop-down menu and round the answer to two decimal places.)
d. If you are interested in decreasing the beta of your portfolio by changing your portfolio allocation in two stocks, which stock would you decrease and which would you increase? Why? (Select the best choice below.)
A.
You should increase asset A and decrease asset D because asset D's beta is negative and asset A has the highest beta.
B.
You should increase asset D and decrease asset A because asset D's beta is negative and asset A has the highest beta.
C.
You should increase asset B and decrease asset C because asset B' beta is close to 1 and asset C's beta is the closest to zero.
D.
You should decrease asset D and increase asset A because asset D's beta is negative and asset A has the highest beta.
Click to select your answer(s).
In: Finance
A construction company is purchasing a new Tractor for over the
road use. The IRS classifies this as 3-year property. The truck
costs $297000.
a) Determine the depreciation allowance for each year using SLN
method.
Year 1 $
Year 2 $
Year 3 $
Year 4 $
b) Determine the depreciation allowance for each year using DDB
method.
Year 1 $
Year 2 $
Year 3 $
Year 4 $
c) Determine the depreciation allowance for each year using
MACRS.
Year 1 $
Year 2 $
Year 3 $
Year 4 $
d) Using a 10% MARR calculate the present worth of the depreciation
for each of the 3 methods above.
PWa = $
PWb = $
PWc = $
In: Economics
This week, your Mechanical and Electrical Systems in Architecture, Engineering, and Construction textbook refers to the National Electrical Code (NEC), or NFPA 70, the set of specifications and standards for installing electrical wiring and equipment in the United States. Similarly, the Canadian Electrical Code (CEC), or CE Code, defines the requirements for electrical installation in Canada.
For this week’s Discussion, you will focus on the inspection requirements for electrical systems used in commercial buildings in your community. Begin by researching the electrical inspection requirements for commercial buildings in your locale.
In your response, describe the regulations that inspection agencies in your community have put in place for commercial buildings. How do these regulations differ across various electrical systems?
In: Electrical Engineering
From a survey of construction labor, the work duration (in number of hours) per day and the average productivity (percent efficiency) were recorded as follows:
|
Duration and Productivity (x, y) |
No. of Observations |
|
6, 45 |
4 |
|
6, 65 |
3 |
|
6, 85 |
10 |
|
8, 45 |
5 |
|
8, 65 |
36 |
|
8, 85 |
24 |
|
10, 45 |
7 |
|
10, 65 |
23 |
|
10, 85 |
13 |
|
12, 45 |
8 |
|
12, 65 |
5 |
|
12, 85 |
2 |
|
Total |
140 |
SHOW ALL WORK
A. Determine the marginal probability distribution function (PDF) for X, the distribution of work duration and plot graphically on px (x) versus x for y = 6, 8, 10 and 12. Present px (x) in terms of relative frequencies of the observations.
B. Similarly, determine the marginal PDF for Y, representing the distribution of productivity.
C. If the work duration per day is 10 hr, what is the probability that the average productivity will be 85%?
In: Statistics and Probability
A construction company in Naples, Florida, is struggling to sell condominiums. In order to attract buyers, the company has made numerous price reductions and better financing offers. Although condominiums were once listed for $300,000, the company believes that it will be able to get an average sale price of $207,000. Let the price of these condominiums in the next quarter be normally distributed with a standard deviation of $13,000.
a. What is the probability that the condominium will sell at a price (i) below $182,000?(ii) above $228,000? (Round final answers to 4 decimal places.)
b. The company is also trying to sell an artist’s condo. Potential buyers will find the unusual features of this condo either pleasing or objectionable. The manager expects the average sale price of this condo to be the same as others at $207,000, but with a higher standard deviation of $17,000. What is the probability that this condo will sell at a price (i) Below $182,000?, (ii) Above $228,000? (Round your answers to 4 decimal places.)
In: Statistics and Probability
CAT Construction has been awarded a contract with the City of Newberg to replace and repair all of the sidewalks in the older residential areas. Based on experience with previous projects, CAT feels the project completion time follows a normal distribution with a mean of 60 days and a standard deviation of 10 days.
CAT anticipates the net profit for completing the project is $100,000.
If the company completes the project is less than 40 days, it will receive an additional $25,000 bonus.
If the company takes longer than 75 days to complete the project, the City will penalize CAT $20,000.
Use the 4 decimal probabilities when using the z-tables.
CAT's expected profit on the project is:
A.$100,000
B.$101,214
C.$99,234
D.$90,274
In: Statistics and Probability
In: Electrical Engineering
3. The market for construction workers is as follows. Labor demand = 400 – 2W Labor supply = 10 + 4W W = wage rate in dollars Marginal expense of labor MEL = 2 + L/2 Marginal value product of Labor MVPL = 200 – L/2
3a. If a monoposony is now the only firm in the city hiring workers, how many workers are hired and what is their wage rate?
3b. If the city charges the monopsony $0.50 extra for each worker hires, how many workers are hired and what is the wage rate (use all the original equations). Compare and explain how your answer differs compared to part a.
In: Economics
Romanos Construction is analyzing its capital expenditure proposals for the purchase of equipment in the coming year. The capital budget is limited to $8,000,000 for the year. Lyssa Bart,
staff analyst at Romanos, is preparing an analysis of the three projects under consideration by Chester Romanos, the company's owner.
| Project A | Project B | Project B | |
| Projected cash outflow | |||
| Net Intial Investment | $ 4,000,000.00 | $ 3,000,000.00 | $ 4,000,000.00 |
| Projected cash inflow | |||
| Year 1 | $ 2,550,000.00 | $ 800,000.00 | $ 2,100,000.00 |
| Year 2 | $ 2,550,000.00 | $ 1,600,000.00 | $ 2,100,000.00 |
| Year 3 | $ 2,550,000.00 | $ 1,000,000.00 | $ 50,000.00 |
| Year 4 | $ 2,550,000.00 | $ 25,000.00 | |
| Required Rate of Return | 6% | 6% | 6% |
Requirement 1. Because the company's cash is limited, Romanos thinks the payback method should be used to choose between the capital budgeting projects.
Calculate the payback period for each of the three projects. Ignore income taxes. (Round your answers to two decimal places.)
|
Project A |
??? |
years |
|
Project B |
??? |
years |
|
Project C |
??? |
years |
Using the payback method, which project(s) should Romanos choose?
In: Accounting
A construction crew wants to hoist a heavy beam so that it is standing up straight They tie a rope to the beam and secure its base (the bottom) Then they pull the rope to raise the top end of the beam off the ground. When the beam makes an angle of 40 degrees with the ground, the top of the beam is 8 feet above the ground There are telephone wires nearby and the workers are worried that the beam may hit the wires. When the beam makes an angle of 60 degrees with the ground, the wires are 2 feet above the top of the beam Will the beam hit the wires if the crew continues to raise it?
In: Math