Whether the standard deviation or covariance

Assignment Help Financial Management
Reference no: EM13977830

Justify whether the standard deviation or covariance is the most significant measurement when adding a risky asset to an already highly risky portfolio. Provide support for your justification.

Reference no: EM13977830

Questions Cloud

What is the amount of the firms total stockholders equity : Purple Dalia, Inc. has the following balance sheet statement items: current liabilities of $803452; net fixed and other assets of $1383839; total assets of $3318886; and long-term debt of $885374. What is the amount of the firm's total stockholders' ..
Optimal risky portfolio and risk-free t-bills : An investor ponders various allocations to the optimal risky portfolio and risk-free T-bills to construct his complete portfolio. Predict two ways that the Sharpe ratio of the complete portfolio could be affected by this choice. Support your predicti..
Invested at compounded annually : What will $5,000 invested for 10 years at 8 percent compounded annually grow to? How many years will it take $400 to grow to $1,671 if it is invested at 10 percent compounded annually? At what rate would $1,000 have to be invested to grow to $4,046 i..
What is the value of the cost pool : The housekeeping services department of RC, a multispecialty practice in Toledo, Ohio had $100,000 in direct cost during 2012. These costs must be allocated to Rugers three revenue producing patient service departments using the direct method. What i..
Whether the standard deviation or covariance : Justify whether the standard deviation or covariance is the most significant measurement when adding a risky asset to an already highly risky portfolio. Provide support for your justification.
Test adding machine program that repeatedly reads in integer : Write and test an adding machine program that repeatedly reads in integers and adds them into a running sum. The program should stop when it gets an input that is 0, printing out the sum at that point.
Calculate the amount of the firms income before tax : Banana Box Corporation has sales of $4339747; income tax of $414828; selling, general, and administrative expenses of $234403; depreciation of $304345; cost of goods sold of $2688054; and interest expense of $143826. Calculate the amount of the firm'..
What is the amount of the firms EBIT : Advantage First Corporation has sales of $4759049; income tax of $535507; selling, general, and administrative expenses of $237405; depreciation of $350830; cost of goods sold of $2663751; and interest expense of $101592. What is the amount of the fi..
Write program that reads positive integer using spim system : Write and test a program that reads in a positive integer using the SPIM system calls. If the integer is not positive, the program should terminate with the message "Invalid Entry"; otherwise the program should print out the names of the digits of..

Reviews

Write a Review

Financial Management Questions & Answers

  Treasury bond to hold to maturity

If you invested in a long-term U.S. Treasury bond to hold to maturity, which form of risk should most concern you?

  Find the present value of the ordinary annuities

Find the present value of the following ordinary annuities. Round your answers to the nearest cent. (Notes: If you are using a financial calculator, you can enter the known values and then press the appropriate key to find the unknown variable

  Life is expected with no anticipated value thereafter

A new computer server costs $860,000, delivered and installed. Annual operating costs are $32,000. A five year life is expected with no anticipated value thereafter. Given a required rate of return of 12%, what is the equivalent annual cost of the se..

  Compute the value of pet food company bonds

Pet Food Company bonds pay an annual coupon rate of 14.83 percent. Coupon payments are paid semiannually. Bonds have 7 years to maturity and par value of $1,000. Compute the value of Pet Food Company bonds if the market interest rate on this type of ..

  Insurance contracts have distinct legal characteristics

Insurance contracts have distinct legal characteristics that make them different from other legal contracts. Identify and discuss other distinct legal characteristics which are found in insurance contracts. Define and contrast the legal relationships..

  What will portfolios new beta be after these transactions

You have a $2 million portfolio consisting of a $100,000 investment in each of 20 different stocks. The portfolio has a beta of 1.1. You are considering selling $100,000 worth of one stock with a beta of 0.9 and using the proceeds to purchase another..

  Dividend per share-growth is expected to continue

Waller Co. (WAG) paid a $0.145 dividend per share in 2006, which grew to $0.309 in 2012. This growth is expected to continue. What is the value of this stock at the beginning of 2013 when the required return is 14.5 percent?

  What is the value of a six-month european call option

A futures price is currently 100. At the end of six months it will be either 112 or 90. The risk-free interest rate is 5% per annum. What is the value of a six-month European call option with a strike price of 100?

  Require an increase in net working capital

McGilla Golf has decided to sell a new line of golf clubs. The length of this project is seven years. The company has spent $1796356 on research and development for the new clubs. The plant and equipment required will cost $28141541 and will be depre..

  Risk and return

ROSE wants to know how much risk she must undertake to generate a good return of her portfolio. The current risk-free return is 5%. The return of overall stock market is 16%. Use the CAPM to calculate how high the beta coefficient of rosemary's portf..

  Either be sick with the disease or perfectly healthy

Assume that there are two health states and individual can either be sick with the disease or perfectly healthy. The probability of sickness is 0.5. Income of the individual when healthy is $14,000 but the income available for consumption becomes $6,..

  Zero growth firm with an expected EBIT

The Wallace Corporation is a zero growth firm with an expected EBIT of $800,000 on a permanent basis, and corporate tax rate of 40 percent. Wallace uses no debt, and the cost of equity to an unlevered firm in the same risk class is 12.0 percent. The ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd