Return on Return on Asset K in Return on State of Probability Asset J in Asset L in Economy of State State State State Вoom 0.26 0.050 0.190 0.250 Growth 0.38 0.050 0.100 0.190 Stagnant 0.21 0.050 0.030 0.080 Recession 0.15 0.050 - 0.070 - 0.190

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: What is an acceptable current ratio?

A: Definition: Ratio analysis: It is the financial analysis tool for measuring the profitability,…

Q: Which of the following is a justification framework for the mean-variance approach? a)if trading is…

A: The question is based on the mean-variance approach of portfolio selection. The approach measures…

Q: Find the variance &Standard deveation of the portfolio

A: Excel Spreadsheet:

Q: The expected return for an individual asset is the sum of expected returns in each state of the…

A: Expected rate of return is the most likely and probable and average rate of return that can be…

Q: What is the formula to find an expected in returns in CAPM

A: In this question, we are required to determine the formula for expected return in Capital Asset…

Q: Use the following information to answer the questions.       State of   Economy Probability of State…

A: Given : State of Economy Probability Return on Asset D Return on Asset E Return on Asset F Boom…

Q: What is the expected return on a two asset portfolio and what are its variance and standard…

A: Two Asset portfolio: The portfolio that has 2 assets is called as two asset portfolio.

Q: A measure of how the returns of two risky assets move in relation to each other is the:

A: By calculating covariance we can identify in what direction the returns move for two securities.

Q: WHAT IS THE VALUE OF DISCOUNTED FLOWS

A: As per Time value of money, there are present values as well as future values.

Q: What is the expected return? What is the variance? What is the standard deviation?

A: State Probability Returns       Boom 0.25 0.15 Normal 0.50 0.08 Slow down 0.15 0.04…

Q: what about in terms of present value?

A: Present value helps us know the value of future cash flows in the present time. A higher interest…

Q: w does expected shortfal

A: Introduction : Value at risk (VaR) can be understood as the metric that measures the magnitude of…

Q: Which one of the following measures is relevant for assessing exposure to systematic risk?

A: Systematic Risk: It refers to the risk caused by factors that are not in the control of an…

Q: a. Calculate the return on investment. (Round your answer to 2 decimal places.) Return on Investment…

A: Return on Investment: It is a measure of performance and profitability that is applied to evaluate…

Q: What is the horizon value? Why is it also called the terminal valueor continuing value?

A: Horizon value is the value of the expected dividend that will be received after the horizon date.

Q: The efficient frontier measures risk by using: Group of answer choices B. Correlation A. Risk-free…

A: Efficient frontier refers to the graphical representation of the set of optimal portfolios…

Q: Expected return and standard deviation a.  What is the expected return of asset​ b?

A: The expected return is the return that an investor expects on its investment under various…

Q: Define diversifiable risk

A: Diversifiable risk It is special to a given business or industry. Regularly known in the feeling of…

Q: Comparison of NPV, IRR or Payback period

A: The net present value (NPV) is the difference between the present value of cash inflows and…

Q: What is future value, FV?

A: Future Value: The future value is the value of the present amount compounded at an interest rate…

Q: The probability distributions of expected returns for the assets are shown in the following table:…

A: We need to compute return and standard deviation for asset A.

Q: Total risk is measured by _____ and systematic risk is measured by _____. Group of answer choices…

A: Risk and return are fundamental concepts that are closely intertwined. They represent the trade-off…

Q: What discount rate is used in a lessor’s NPV analysis?

A: Weighted average cost of capital is used as discount rate in Lessor's NPV analysis.

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: Illustrate the calculation of the standard deviation of returns?

A: Standard deviation refers to a measure of variation or dispersion of a set of values. We can…

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 type of risk is measured by the standard deviation?

A: Standard deviation is the measure of risk that the actual return of an investment will deviate from…

Q: Beta is which of the following: A) standard deviation. B) total risk. C) Beta is the relationship…

A: option C is correct  Beta is the relationship which is between an investment's return, and the…

Q: Which of the following are measurements of risk? range coefficient of variation mean average…

A: The measurements of risk are range, coefficient of variation, standard deviation, and median.…

Q: Find the correlation of assets S and T if the standard deviation of S is 4 and standard deviation of…

A: Correlation is a statistic that helps in measuring the degree to which two variables move in…

Q: The expected return of a portfolio is simply the weighted average of the expected returns for the…

A: When investors create a portfolio of assets, one of the key metrics of interest is the expected…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.