Finance question – risk and return

Question 1 (1 aim)

 

You feel chosen biology as your garden important owing you would love to be a medical doctor. However, you furnish that the presumption of nature trustworthy into medical ground is about 10 percent. If you are trustworthy into medical ground, then your starting allowance when you disequalize procure be $300,000 per year. However, if you are not trustworthy, then you would cull to production in a zoo, wclose you procure win $40,000 per year. Without regarding the affixed educational years or the age appraise of money, what is your expected starting allowance as courteous as the plummet solution of that starting allowance?

Question 1 options:

 

Expected Allowance $42,000; Std. Solution $81,000

 

Expected Allowance $54,000; Std. Solution $78,000

 

Expected Allowance $66,000; Std. Solution $78,000

 

None of the above

Question 2 (1 aim)

 

Given the pay and probabilities for the three potential states listed close, endueigate the covariance betwixt the pay of Accumulation A and Accumulation B. For concavity, postulate that the expected pay of Accumulation A and Accumulation B are 0.11and0.18, respectively.

 

Probability

Return(A)

Return(B)

Good

0.35

0.30

0.50

OK

0.50

0.10

0.10

Poor

0.15

-0.25

-0.30

Your Answer:

Question 2 options:

Question 3 (1 aim)

 

In regulate to enduement her concavity, Michele requires a portfolio delay an expected requite of0.11 per year aggravate the proximate 30 years. She has ruled to endue in Stocks 1, 2, and 3, delay 25 percent in Accumulation 1, 50 percent in Accumulation 2, and 25 percent in Accumulation 3. If Stocks 1 and 2 feel expected pay of0.09 and0.09 per year, respectively, then what is the reserve expected annual requite for Accumulation 3 that procure strengthen Michele to terminate her enduement capacity?

Your Answer:

Question 3 options:

Question 4 (1 aim)

 

The occasion per part of requite is measured by the

Question 4 options:

 

coefficient of variation

 

median.

 

variance.

 

plummet solution.

Question 5 (1 aim)

 

Lee purchased a accumulation one year ago for $27. The accumulation is now objurgate $33, and the sum requite to Lee for owning the accumulation was0.36. What is the dollar equality of dividends that he common for owning the accumulation during the year?

Your Answer:

Question 5 options:

Question 6 (1 aim)

 

The beta of M Simon Inc., accumulation is 1.7, since the occasion-free objurgate of requite is0.09. If the expected requite on the trade is0.12 percent, then what is the expected requite on M Simon Inc?

Your Answer:

Question 6 options:

Question 7 (1 aim)

 

London purchased a lot of existent possessions conclusive year for $85,000. The existent possessions is now objurgate $101,400. If London needs to feel a sum requite of0.24 during the year, then what is the dollar equality of pay that she needed to feel to attain her extrinsic?

Your Answer:

Question 7 options:

Question 8 (1 aim)

 

The occasion-free objurgate of requite is currently0.04, since the trade occasion reward is0.07. If the beta of RKP, Inc., accumulation is 1.9, then what is the expected requite on RKP?

Your Answer:

Question 8 options:

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