In: Finance
Bob is your clients and you advise him in his portfolio selections and investment decisions. According to your analysis, Bob has a degree of risk aversion of 3.1. The risk-free rate is currently 2%, the expected return on the market portfolio is 8.7%, and the volatility of the market portfolio is 19%.
Advise Bob on his optimal capital allocation by giving the weight (in percentage) to put in the risky market portfolio.
{Give your answer as a percentage with 2 decimals, e.g., if the result of your calculations is 0.345224 (or 34.5224%) , enter 34.52 as your answer.}
In: Finance
Bond RTY.AF has a 5 percent coupon, makes semiannual payments, currently has 28 years remaining to maturity, and is currently priced at par value. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of Bond RTY.AF? Be sure to include the sign, especially if the bond price falls and the percentage change is negative. (Do not include the percent sign (%). Enter rounded answer as directed, but do not use the rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).
In: Finance
OceanGate sells external hard drives for $200 each. Its total fixed costs are $30 million, and its variable costs per unit are $140. The corporate tax rate is 30%. If the economy is strong, the firm will sell 2 million drives, but if there is a recession, it will sell only half as many. a. What will be the percentage decline in sales if the economy enters a recession? b. What will be the percentage decline in profits if the economy enters a recession? c. Comparing your answers to (a) and (b), What is the firm’s degree of operating leverage?
In: Finance
The lifetime of light bulb is normally distributed with mean of 1400 hours and standard deviation of 200 hours.
a. What is the probability that a randomly chosen light bulb will last for more than 1800 hours?
b. What percentage of bulbs last between 1350 and 1550 hours?
c. What percentage of bulbs last less than 1.5 standard deviations below the mean lifetime or longer than 1.5 standard deviations above the mean?
d. Find a value k such that 20% of the bulbs last longer than k hours.
In: Math
Do not do any interim rounding, calculate values to at least 6 decimal places before converting to a percentage, state answers as a percentage to 2 decimal places, do not include labels (%, $). For example, .06487 should be input as 6.49
Consider the following information about expected returns for two securities, Ravenwood Consulting and Brody Enterprises.
| Probability | Ravenwood | Brody | |
| Boom | 40% | 13.5% | -2% |
| Neutral | 25% | 8% | 7% |
| Bust | 35% | -1% | 9.8% |
The expected return for a portfolio invested 65% in Ravenwood and 35% in Brody is:
In: Finance
|
Term (years) |
Today's Rate |
|
1 |
2.04% |
|
2 |
2.34% |
|
3 |
2.46% |
Based on the expectations hypothesis, what does the market expect the 2 year rate in 1 years to be?
State your answer as a percentage to 2 decimal places (e.g., 4.39)
Given the following information, what is the percentage dividend yield between today and period 1?
|
Today’s Dividend = |
$4.91 |
|
Expected Growth rate in dividends = |
4.72 |
|
Discount Rate (Required return) = |
5.12 |
Calculate your answer to two decimal places (e.g., 2.51)
In: Finance
State Kaldor’s stylized facts (4 of them). Derive their implications for the share of national income paid to the owners of capital, the capital income share. Assume firms combine capital and labor to produce output according to Y = K α N 1−α where α is the elasticity of output to capital, i.e. the percentage change in output for a given percentage change in capital. What type of data would be informative of the value of this elasticity? Explain your answer and any assumptions you may need to reach your conclusion.
In: Economics
In a study of the accuracy of fast food drive-through orders, Restaurant A had 257 accurate orders and 73 that were not accurate. a. Construct a 95% confidence interval estimate of the percentage of orders that are not accurate. b. Compare the results from part (a) to this 95% confidence interval for the percentage of orders that are not accurate at Restaurant B: 0.202less thanpless than0.284. What do you conclude? a. Construct a 95% confidence interval. Express the percentages in decimal form. nothingless thanpless than nothing (Round to three decimal places as needed.)
In: Statistics and Probability
A voter survey has determined that 15% of the residents of
Barkhampsted County own an iPod. Furthermore, 85% of these iPod
owners are under 30 years of age, whereas 15% are 30 or older. Only
30% of the people who don't own iPods are under 30 years of
age.
What percentage of the residents who are 30 or older own iPods? Or,
equivalently, what is the conditional probability that a resident
known to be 30 or more years of age will own in iPod? (Give your
answer as a percentage correct to two decimal
places.)
_________%
In: Statistics and Probability