You Invest $1000 in a Risky Asset with an Expected

question 43

Multiple Choice

You invest $1000 in a risky asset with an expected rate of return of 0.17 and a standard deviation of 0.40 and a T-bill with a rate of return of 0.04.
-What percentages of your money must be invested in the risk-free asset and the risky asset,respectively,to form a portfolio with a standard deviation of 0.20?

• A)30% and 70%
• B)50% and 50%
• C)60% and 40%
• D)40% and 60%
• E)Cannot be determined.

Recognize the implication of variable and fixed costs in special orders and maximizing profit.

Identify relevant and irrelevant costs in decision-making scenarios.

Calculate the maximum external price acceptable in outsourcing scenarios.

Understand the concept of bank reserves and the difference between required and excess reserves.

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Definitions:

Single-phase Synchronous Motor

A type of AC motor that operates at a constant speed, synchronized with the frequency of the supply current.

Hysteresis Motor

A type of synchronous motor that operates using the hysteresis loss principle in the rotor to achieve torque, known for quiet operation and precise speed control.

Impedance

The total opposition to current flow in an AC circuit, including both resistance and reactance, measured in ohms.

Repulsion

A force between two similar or like charges that causes them to move apart.