Question

Sam Tsantes has analyzed two stocks: Acme Airlines and Ajax Travel Associates. His analysis concludes that Acme has a 20\% change of producing a return of 10\% and a 80\% chance of producing a return of 15\%. As the same time Ajax has a 40\% chance of losing 25\% and a 60\% chance of producing a return of 50\%. If same invests \$70,000 in Acme shares and \$30,000 in Ajax shares, the expected return on the portfolio will be closet to: 1-14.0\% 2-18.2\% 3-20.0\% 4-15.8\% 

          Sam Tsantes has analyzed two stocks: Acme Airlines and Ajax Travel Associates. His
analysis concludes that Acme has a 20\% change of producing a return of 10\% and a
80\% chance of producing a return of 15\%. As the same time Ajax has a 40\% chance of
losing 25\% and a 60\% chance of producing a return of 50\%. If same invests \$70,000 in
Acme shares and \$30,000 in Ajax shares, the expected return on the portfolio will be
closet to:
1-14.0\%
2-18.2\%
3-20.0\%
4-15.8\%
Show more…
Sam Tsantes has analyzed two stocks: Acme Airlines and Ajax Travel Associates. His analysis concludes that Acme has a 20% change of producing a return of 10% and a 80% chance of producing a return of 15%. As the same time Ajax has a 40% chance of losing 25% and a 60% chance of producing a return of 50%. If same invests $70,000 in Acme shares and $30,000 in Ajax shares, the expected return on the portfolio will be closet to: 1-14.0% 2-18.2% 3-20.0% 4-15.8%

Added by Monica L.

Close

Horngren’s Cost Accounting
Horngren’s Cost Accounting
Srikant M. Datar, Madhav V. Rajan 16th Edition
AceChat toggle button
Close icon
Ace pointing down

Please give Ace some feedback

Your feedback will help us improve your experience

Thumb up icon Thumb down icon
Thanks for your feedback!
Profile picture
Sam Tsantes has analyzed two stocks: Acme Airlines and Ajax Travel Associates. His analysis concludes that Acme has a 20% chance of producing a return of 10% and an 80% chance of producing a return of 15%. At the same time, Ajax has a 40% chance of losing 25% and a 60% chance of producing a return of 50%. If Sam invests $70,000 in Acme shares and $30,000 in Ajax shares, the expected return on the portfolio will be closest to: 1- 14.0% 2- 18.2% 3- 20.0% 4- 15.8%
Close icon
Play audio
Feedback
Powered by NumerAI
Jennifer Stoner Ivan Kochetkov
Kathleen Carty verified

Jay Patel and 72 other subject Principles of Accounting educators are ready to help you.

Ask a new question
*

Labs

-

Want to see this concept in action?

NEW

Explore this concept interactively to see how it behaves as you change inputs.

View Labs
*

Recommended Videos

-
an-investor-is-considering-combining-stock-a-and-b-into-a-portfolio-the-portfolio-weights-will-be-each-at-50-the-expected-returns-of-stock-a-and-stock-b-are-5-and-12-the-volatilities-for-both-stocks-a

Jay P.
johnson-an-investor-in-acme-co-asked-smith-cpa-for-advice-on-the-propriety-of-acmes-financial-reporting-for-two-of-its-investments-smith-obtained-the-following-information-related-to-the-inv-15555

Johnson, an investor in Acme Co., asked Smith, CPA, for advice on the propriety of Acme's financial reporting for two of its investments. Smith obtained the following information related to the investments from Acme's December 31, Year 9 financial statements: Acme has 20% ownership interest in Kern Co., represented by 200,000 shares of outstanding common stock purchased on January 2, Year 9 for $600,000. This investment gives Acme significant influence over Kern. Acme did not elect the fair value option for this investment. Acme has 20% ownership interest in Wand Co., represented by 20,000 shares of outstanding common stock purchased on January 2, Year 9 for $300,000. This investment does not give Acme significant influence over Wand. Acme did not elect the fair value option for this investment. On January 2, Year 9, the carrying amounts of the acquired shares of both investments equaled their purchase prices. Kern reported earnings of $400,000 for the year ended December 31, Year 9 and declared and paid dividends of $100,000 during Year 9. Wand reported earnings of $350,000 for the year ended December 31, Year 9 and declared and paid dividends of $60,000 during Year 9. On December 31, Year 9, Kern's and Wand's common stock were trading over the counter at $18 and $20 per share, respectively. Complete Acme's summary of investment securities using the information above. Enter the appropriate amounts in the designated cells below. Enter all amounts as positive values. If no answer is necessary, enter a zero (0). Balance sheet Investment in Kern Investment in Wand 1. Investment in investee Statement of income Investment in Kern Investment in Wand 2. Equity in earnings of investee 3. Dividend income 4. Unrealized holding gain

Akash M.
introduction-stock-broker-co-specializes-in-investment-advising-for-clients-interested-in-creating-an-investment-portfolio-with-their-funds-and-assets-on-march-5th-2022-mark-smith-a-recent-c-93817

Stock Broker Co. specializes in investment advising for clients interested in creating an investment portfolio with their funds and assets. On March 5th, 2022, Mark Smith, a recent college grad with an investment fund of $10,000, reached out to Stock Broker Co. requesting our assistance in creating his portfolio. He has no experience with financial management, but after extensive studying, he has decided to invest in three stocks: Alpha, Bravo, and Charlie. However, he does not know how much he should invest in each stock for the greatest benefit. Moreover, he's expecting returns on a few of his other projects, so he wants Stock Broker Co. to find the proportion of each stock that should dominate his portfolio so that he can further invest based on our advice. He is passionate about buying a new house and needs to earn enough money for a big down payment to cover a higher percentage of the expected mortgage. Mark has expressed his intentions to minimize as much risk as possible with an expected return of at least 10%. Stock Broker Co. has computed the covariances of the three companies, their individual expected returns, and risks. They have a month to propose an optimal portfolio to Mark, explaining how to invest the money into these stocks while minimizing risk. They also know that the proportion of the portfolio should be x1 + x2 + x3 = 1, according to Markowitz, where x1, x2, and x3 are the proportion of the portfolio invested in Alpha, Bravo, and Charlie, respectively. Problem: Mark wants to invest most of his funds in the company with the least amount of risk and a return of 10%. Decision Variable: x1, x2, x3, that is, the amount invested in each of the three stocks Constraint: At least 10% return x1 + x2 + x3 = 1 Please create a solution and conclusion to the problem presented. Alpha Bravo Charlie Total Variance n invested Expected return Risk 0.45259435 0.103957085 0.443448561 0.999999996 1 0.018135624 0.062 0.0146 0.146 0.0854 0.128 0.0289 0.1 0.028301476 Alpha Bravo 0.0146 0.0187 0.0145 Charlie 0.0187 0.0854 0.0104 Alpha Bravo Charlie 0.0145 0.0104 0.0289

Akash M.
*

Recommended Textbooks

-
Horngren’s Cost Accounting

Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition
achievement 1,317 solutions
Cost Accounting A Managerial Emphasis

Cost Accounting A Managerial Emphasis

Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan 14th Edition
achievement 1,767 solutions
Principles of Accounting Volume 1: Financial Accounting

Principles of Accounting Volume 1: Financial Accounting

Mitchell Franklin, Patty Graybeal, Dixon Cooper 1st Edition
achievement 1,279 solutions
*

Transcript

-
00:01 Okay, so in this problem, we're going to have to use the following conjectures in the following exercise.
00:05 So, g is equal to x over 2, and we have to find the value of h also.
00:11 So parallelogram opposite side conjecture states that the opposite sides of a parallelogram are congruent.
00:16 That means that they're the same one.
00:18 So if we have a parallelogram, john, who's the following, and the opposite sides are going to be congruent.
00:27 So these two and these two sides are going to be congruent, which meaning they have the same side ones.
00:32 We can all represent this in a proof format.
00:36 So we can do r -l -f -r -f is congruent to s -line -s -l.
00:43 This is because of parallelogram, opposite, side, conjection.
01:07 Then we also have, let me know r -f is equal to s -o.
01:12 That's because of definition of congruent segments...
Need help? Use Ace
Ace is your personal tutor. It breaks down any question with clear steps so you can learn.
Start Using Ace
Ace is your personal tutor for learning
Step-by-step explanations
Instant summaries
Summarize YouTube videos
Understand textbook images or PDFs
Study tools like quizzes and flashcards
Listen to your notes as a podcast
Continue solving this problem
Create a free account to:
  • View full step-by-step solution
  • Ask follow-up questions with Ace AI
  • Save progress and study later
Continue Free
Numerade

Get step-by-step video solution
from top educators

Continue with Clever
or



By creating an account, you agree to the Terms of Service and Privacy Policy
Already have an account? Log In

A free answer
just for you

Watch the video solution with this free unlock.

Numerade

Log in to watch this video
...and 100,000,000 more!


EMAIL

PASSWORD

OR
Continue with Clever