Assume that you hold a well-diversified portfolio that has an expected return of 10.0% and a beta of 1.50. You are in the process of buying 2,000 shares of Omega Corp at $10 a share and adding it to your portfolio. Omega has an expected return of 15.0% and a beta of 1.75. The total value of your current portfolio is $80,000. What will the expected return and beta on the portfolio be after the purchase of the Omega stock

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Answer 1

Based on the expected returns and beta of the portfolio and investment, after the purchase of omega stock, the expected return is 11% and the beta is 1.55.

What is the expected return?

Find the value of the Omega stock:

= 2,000 x 10

= $20,000

The total value of the new portfolio is:

= 80,000 + 20,000

= $100,000

Expected value is:

= (80,000 / 100,000 x 10%) + (20,000 / 100,000 x 15%)

= 8% + 3%

= 11%

What is the beta?

= (80,000 / 100,000 x 1.50) + (20,000 / 100,000 x 1.75)

= 1.2 + 0.35

= 1.55

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Related Questions

A cooperative agreement among oligopolists is more likely to be maintained, a. the greater the number of oligopolists. b. the larger the number of buyers of the oligopolists' product. c. the smaller the number of buyers of the oligopolists' product.

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A cooperative agreement among oligopolists is likely to be the more likely it is that the game among the oligopolists will be played over and over again.

Why do oligopolists frequently appear to act together?

While oligopoly companies in a sure market decide what quantity to offer and what fee to fee, they face a temptation to act as though they were a monopoly. With the resource of appearing collectively, oligopolistic companies can preserve enterprise output, charge a better charge, and divide up the income amongst themselves.

While corporations within the identical corporation work together to increase their mutual profits rather than competing doggedly with each distinctive, it's miles known as an oligopoly scenario. Oligopolies are placed in the course of the arena or even appear like growing into advantageous industries.

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Manufacturers will work with specific retailers depending on where their target consumers expect to find their products. what does this process refer to?

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Manufacturers will work with specific retailers depending on where their target consumers expect to find their products in the process known as Consumer expectation.

What is Consumer expectation?

Consumer expectations can be regarded as the economic outlook of households.

Expectations in the path of consumers help them in the bearing on current economic activity and help Manufacturers to work with specific retailers depending on where their target consumers.

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Which of the following best describes retained earnings? Select one: Shows in and out flows of cash from the company during a period Provides a description of sources of funding and uses of funding, at a point in time Records level of reinvested profits Total assets less net liabilities equals equity

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The option that best describes retained earnings is records level of reinvested profits.

What is retained earnings?

Retained earnings is the amount of a company's earnings that is not paid out to shareholders as dividends or used to pay debtors. It is the amount of money that can be reinvested into the business.

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When compliance, clarification, culture, and connection are all effectively addressed with a strategic system in place, the organization would be considered as:

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When all four elements of clarification, culture, compliance and connection are effectively addressed through a strategic onboarding system, the organization will be considered successful onboarding.

What is the successful onboarding?

A successful onboarding program is most expected to include clarification, compliance, culture, and connection and follow-ups, relying on the size and needs of any company. This is also called as the 4 C's of the onboarding.

Therefore, It all start out in the present moment, a new employee accepts the position.

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Emilia bought some Japanese sushi at the grocery store for $14. When she got it home and served it to her family, it tasted rancid. She brought the sushi back the next day and was given a full refund with no questions asked. Evidence indicates that successful handling of product and service failures as in Emilia's situation leads to _______. a. decreased levels of online shopping b. lower levels of customer loyalty c. increased levels of online shopping d. higher levels of customer loyalty

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D. Higher levels of customer loyalty

What is customer loyalty?

Customer loyalty is described as when clients reward a business again and time again business. Consistently choosing one brand over another, loyal customers frequently stand up for that brand against rivals.

Building a loyal customer base means making them willing to purchase your products at any cost, especially when there are less expensive options available. Customers that are devoted and pleased with your product or service can also promote it to their friends and family and support your business even in trying times.

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A conclusion of the Hawthorne studies was that A conclusion of the Hawthorne studies was that giving less attention to employees increases worker productivity. giving more attention to employees increases worker productivity. increasing synergy increases worker productivity. cutting costs through outsourcing harms employee morale and productivity.

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The Hawthorne studies concluded that giving more attention to the employees increases the workers productivity. Therefore, the correct option is 2nd.

What was Hawthorne Studies?

The Hawthorne studies is all about the increment of the individual performance at the workplace. It tries to understand what are the factors that motivate a person for giving the high level of production.

The experiments of the Hawthorne studies conclude that by focusing in the individual needs the workers productivity increases. Therefore, the correct option is 2nd.

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Because the slope of the production function becomes flatter as more capital is added, the marginal product of capital is

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As the slope of the production function becomes flatter as more capital is added, the marginal product of capital is "decreasing".

What is marginal product of capital?

The extra output that emerges from adding one unit of capital typically cash is known as the marginal product of capital.

This statistic frequently applies to start-up businesses that depend on private financing to get off the ground. The increased output brought on by adding a worker is known as the marginal product of labour.

Diminishing marginal returns, the marginal product that starts to decline, is an indicator of this phenomenon. The value that these additional units offer to the organisation, in terms of output generated, starts to diminish because there aren't enough workers to operate with the extra equipment.

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Question 9(Multiple Choice Worth 5 points) (04.03 LC) In our culture, one recent fatal event is common and does not affect the insurance business may encourage individuals to decrease insurance coverage may trigger fear and, therefore, more insurance sales frequently results in switching insurance companies

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The pandemic and measures were taken to control the spread disease have significantly disrupted economic activity in countries around the world, resulting in significant business interruption losses.

What was the impact of pandemic over the insurance businesses?

Businesses across many sectors of the economy faced major decline in the revenue during the pandemic due to which government direct them to close their businesses.

Insurers and their associations around the world stated that most of the policyholders have not acquired insurance coverage which will respond to the business interruption losses that result from pandemic business closures.

Business interruption insurance against pandemic risk could be provided with support from governments based on the experience of risk insurance programs.

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This year you have decided to focus your efforts on marketing to employer group plans. One employer provides you with a list of their retirees and asks you to contact them to explain the characteristics of the plan they have selected. What should you do?.

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The thing that should be done regarding the marketing it it go ahead and call the retirees.

What is marketing?

It should be noted that marketing is the strategies that are put in place in order to increase sales.

In this case, the employer provides you with a list of their retirees and asks you to contact them to explain the characteristics of the plan they have selected. It is important to call them.

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in which way does the concept of product life cycle (plc) help marketing managers?

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The concept of product life cycle (plc) help marketing managers to know when to roll out a product for sale and when to develop or produce more products.

What is product life cycle?

Product life cycle talks about the life span of a product.

It include how long a product can last before spoilage or before it becomes obsolete.

It helps managers to plan rebranding of a product and new production.

Therefore, The concept of product life cycle (plc) help marketing managers to know when to roll out a product for sale and when to develop or produce more and new products.

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The current popularity of teams can be attributed to the fact that ________. A. they outperform individuals B. they represent a better way to use employee talents C. they reduce the need for coordination and supervision D. they aid in the performance of simple tasks that do not require diverse inputs E. they strengthen the worth of individual team players over the team

Answers

Generally, the current popularity of teams are mostly due to the fact that they represent a better way to use employee talents.

What is a team popularity?

This refers to a team quality of being liked, enjoyed and accepted by a large number of people.

In most times, the popularity of typical teams are because they represent a better way to use employee talents for their organizational success.

Therefore, the Option B is correct.

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The amount of a product an organization expects to sell during a certain period of time, based on a specified level of marketing effort, is called a:.

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A sales forecast is the volume of merchandise that an organization anticipates selling over a given period of time, based on a predetermined level of marketing activity.

What exactly do you mean by marketing?

Marketing describes the actions a business does to encourage the purchase or sale of a good or service. Advertising, selling, and delivering goods to customers or other firms are all included in marketing.

Sales forecasting is the act of determining how much a sales unit—which can be a single salesperson, a sales team, or an entire company—will sell over the course of the upcoming week, month, quarter, or year.

Thus, organizing expectations for sales during a given period of time refers to the sales forecasts.

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1. describe a buying situation in which you were successfully cross-sold and a situation in which you were ""traded up.""

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To Cross-sold means a sales tactic used to get a customer to spend more by purchasing a product that's related to what had been bought already. Read below about trade up.

What does it mean to be traded up?

To be traded up means to have added a higher-priced, higher-quality version of a product to the range, generally to increase sales of the lower-priced model through consumer association of its image with the more prestigious model.

Therefore, the correct answer is as given above.

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Your mortgage is an ARM with a 1 year adjustment interval, 4% margin, and a 2% periodic cap. Your initial APR on this loan was 4.5%. Over the last 5 years the market rates of interest have risen dramatically. The current interest rate index for your loan is 8.5 %. What APR are your monthly payments being calculated on today

Answers

The APR that the monthly payments is being calculated on today will be 10.5%.

How to calculate the APR?

It should be noted that the annual percentage rate(APR) will be calculated as:

= Index + Margin

Based on the information given, the APR will be:

Index = 4.5 - 4.0 = 0.5

APR will be:

= (0.5 + 6) + 4

= 6.5 + 4.

= 10.5%

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Dr. Klein receives an email inviting her to submit an article based on her research to The Journal of Science. The email promises a rapid publication process and charges a fee to cover the costs of expediting the process. She is not familiar with this journal and decides to look up its impact factor in Journal Citation Reports. Unfortunately, it is not listed there. What would Dr. Klein likely conclude about this journal

Answers

Dr. Klein would likely conclude that this journal is likely predatory.

What is a predatory journal?

A predatory journal is a publication claiming to be a legitimate scholarly journal but misrepresents its publishing practices, lacking peer reviews because of the promised rapid publication process.

This conclusion is based on the fact that the Journal Citation Reports database provides impact factors and rankings of many journals in the social and life sciences with millions of citations, which this predatory journal lacks.

Thus, Dr. Klein would likely conclude that this journal is likely predatory.

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a 12oupon bond, semiannual payments, is callable in 3 years. the call price is $1,120; if the bond is selling today for $1,110, what is the yield to call?

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Based on the coupon rate, the call price and the selling price, the yield to call is 11.06%.

How is the yield to call found?

The formula to find it is:

= (Coupon + (Call price - Current price) / Number of periods ) / ( (Call price + Current price) / 2 ) x 2

Solving gives:

=( (12%/2  x 1,000) + (1,120 - 1,110) / 6 semi annual periods ) ) / ( (1,120 + 1,110) / 2) x 2

= (61.667 / 1,115) x 2

= 11.06%

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depositors lack of information about the quality of bank assets can lead to:

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Depositors' lack of information about the quality of bank assets can lead to A) bank panics.

What are bank panics?

Bank panics refer to the simultaneous loss of confidence in banks' solvency.

This loss of confidence may drive many depositors to demand a refund of their bank deposits at the same time.

Bank panics worsen asymmetric information problems in credit markets.

Answer Options:

A) bank panics.

B) bank booms.

C) sequencing.

D) asset transformation

Thus, depositors' lack of information about the quality of bank assets can lead to bank panics, not booms, sequencing, or asset transformation.

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_____ consists of partially completed products in various stages of completion that are awaiting further processing.

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Products that are partially completed and still in the various production stages of completion are referred to as: work-in-progress inventory

What is Work-in-Progress Inventory?

Work-in-progress inventory can be defined as goods that are partially completed, which can also be called "in-process inventory". They are products that are not ready for sale.

For example, in a coffee company, work-in-progress inventory may include, shopping boxes, coffee beans, labels, among others.

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Although the unemployment rate is the single best indicator of how well the labor market is working, we discussed in class that it is considered incomplete because it: does not count discouraged workers. does not measure how well people are matched to their jobs. counts part-time workers who would like to work full time as fully employed.

Answers

The unemployment rate is not considered to be a complete measure because it does not count discouraged workers.

How is the unemployment rate calculated?

The unemployment rate includes only people who are still actively searching for work and they have to be in the labor force.

People who have looked for jobs for a while and then got discouraged and given up, are not counted as unemployed which therefore depresses the unemployment rate.

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true or false: when testing changes, you should be sure to gain consensus and buy-in from all the people who would eventually be affected by the change.

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when testing changes, you should be sure to gain consensus and buy-in from all the people who would eventually be affected by the change.

What are changes in the society?

Changes can be regarded as the process which involves the transition from one idea to another, it is the changing of ones mindset which will later reflect in ones behavior.

Therefore, when testing changes, you should be sure to gain consensus and buy-in from all the people that will be affected.

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when scrum team members meet and collaborate with each other to find the best way to build and deliver the software to the customer, which of the following agile values is being practiced?

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When scrum team members meet and collaborate with each other to find the best way to build and deliver the software to the customer, the agile value being practiced is:

individuals and interactions over processes and tools;

What is the Agile value of collaboration?

The agile value of collaboration requires that team members should interact with one another to brainstorm over a matter and know the best methods to use in solving a problem.

So when the scrum team members engage in the interaction above, they are heed to the first Agile value.

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A financial statement that has a date line similar to "For the month ended June 30, 20XX," is a(n):

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A financial statement that has a date line similar to "For the month ended June 30, 20XX," is an income statement.

What is income statement?

An income statement is what measures the profits and losses over a specific period for a company. It is used for reporting the financial performance over an accounting period.  

Hence, a financial statement that has a date line similar to "For the month ended June 30, 20XX," is an income statement.

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An increase in a firm's total asset turnover will:

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An increase in a firm's total asset turnover means that the company is more efficient at using its assets.

What is Asset turnover ratio?

Asset turnover ratio can be regarded as the ration that is found which describes  the value of a company's sales and value of its assets.

It help the company to analyze the efficiency of the company in deploying its assets.

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Are fixed costs considered to be anticipated or unanticipated costs? are variable costs considered to be anticipated or unanticipated costs?.

Answers

Answer:

anticipated (Think)

Explanation:

The term fixed cost refers to a cost that does not change with an increase or decrease in the number of goods or services produced or sold. Fixed costs are expenses that have to be paid by a company, independent of any specific business activities. This means fixed costs are generally indirect, in that they don't apply to a company's production of any goods or services.

The failure to properly record an adjusting entry to accrue an expense will result in an:

Answers

The failure to properly record an adjusting entry to accrue an expense will result in an understatement of expenses and an understatement of liabilities. This is further explained below.

What are expenses?

Generally, expenses are simply defined as what it would take or what it would cost to do anything.

In conclusion, Incorrectly recording an accrual adjustment entry will result in a misstatement of both costs and liabilities.

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You are advising a coffee shop manager who wants to calculate how much sales will change if the price of a latte rises. You tell him he should measure elasticity by using the mid-point method in his calculations because the mid-point method will provide:

Answers

The coffee shop manager should measure elasticity with the mid-point method because he will get the same information regardless of a fall or rise in price.

Why should the midpoint formula be used?

When the midpoint formula is used to calculate elasticity, it calculates the elasticity using both price increases and decreases such that the base is the same.

This allows you to receive the same elasticity result of either price point that was used and so allows for more accurate analysis.

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Managing the Economy with Monetary Policy In this exercise you will be evaluating the economic condition of the country and making decisions in order to keep the economy level. The amount of money in circulation has a tremendous effect on the economy and inflation. Imagine if you found $100,000 in cash floating around your front yard. What would you do with it

Answers

The inference if one finds $100,000 in cash floating around your front yard is to take it to the police.

What is an inference?

It should be noted that an inference simply means the conclusion that can be deduced based on the information given in a literary work.

In this case, the inference if one finds $100,000 in cash floating around your front yard is to take it to the police. This is essential to locate the owner.

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A knowledge management system should help an organization:

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The knowledge management system should help an organization to:

promote innovationimprove customer serviceincrease revenue by reducing the delivery timeimprove employee retention rates through reward

What is a knowledge management system?

This refers to the information system that stores and retrieves knowledge to improve understanding and collaboration of the business process.

Hence, the system is expected to promote innovation, improve customer service, increase revenue by reducing the delivery time, improve employee retention rates through reward.

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Assume that an adjusting entry was made on november 30 for earned, but unpaid employee salaries of $260 which represented 2 days of salaries earned for november 29-30. on december 5, the employees are paid for five days. record the journal entry on december 5 assuming that reversing entries are used by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.

Answers

The journal entry to be recorded for the transaction that took place on December 5 will affect a debit in Salaries and Wages Expense for $650; and a credit in the Cash balance equally.

What is a journal entry?

A systematic method of recording the monetary and financial transactions in a chronological way of their occurrence, is known as a journal entry. Each journal entry has a debit and credit effect of equal amount.

The journal entry for the transaction has been added in the image for better reference.

Hence, the significance of journal entry is aforementioned.

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The Deepwater oil spill in the Gulf of Mexico in 2010 was made much worse because BP Oil did not have plans in place for surprises. Planning for unexpected events is called

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Planning for unexpected events is called contingency planning.

What is contingency planning?

A contingency plan is a strategy created to assist an organization in effectively responding to a large crisis, event, or condition that may or may not occur in the future.

Because it can be utilized as a fallback strategy in the event that desired outcomes are not achieved, a contingency plan is also known as a "Plan B" or backup plan. Business continuity (BC), disaster recovery (DR), and risk management all include contingency planning.

It all comes down to risk management, risk reduction, and preparation for quick disaster recovery.

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