| Portfolio Details | ||||||
| Stock | Expected return |
Standard deviation |
Correlation ##(\rho_{A,B})## | Dollars invested |
||
| A | 0.1 | 0.4 | 0.5 | 60 | ||
| B | 0.2 | 0.6 | 140 | |||
What is the standard deviation (not variance) of returns of the above portfolio?
Question 444 investment decision, corporate financial decision theory
The investment decision primarily affects which part of a business?
Question 488 income and capital returns, payout policy, payout ratio, DDM
Two companies BigDiv and ZeroDiv are exactly the same except for their dividend payouts.
BigDiv pays large dividends and ZeroDiv doesn't pay any dividends.
Currently the two firms have the same earnings, assets, number of shares, share price, expected total return and risk.
Assume a perfect world with no taxes, no transaction costs, no asymmetric information and that all assets including business projects are fairly priced and therefore zero-NPV.
All things remaining equal, which of the following statements is NOT correct?
A man has taken a day off from his casual painting job to relax.
It's the end of the day and he's thinking about the hours that he could have spent working (in the past) which are now:
Question 523 income and capital returns, real and nominal returns and cash flows, inflation
A low-growth mature stock has an expected nominal total return of 6% pa and nominal capital return of 2% pa. Inflation is expected to be 3% pa.
All of the above are effective nominal rates and investors believe that they will stay the same in perpetuity.
What are the stock's expected real total, capital and income returns?
The answer choices below are given in the same order.
Which of the below formulas gives the payoff at maturity ##(f_T)## from being short a future? Let the underlying asset price at maturity be ##S_T## and the locked-in futures price be ##K_T##.
Question 745 real and nominal returns and cash flows, inflation, income and capital returns
If the nominal gold price is expected to increase at the same rate as inflation which is 3% pa, which of the following statements is NOT correct?
Suppose the current Australian exchange rate is 0.8 USD per AUD.
If you think that the AUD will appreciate against the USD, contrary to the rest of the market, how could you profit? Right now you should: