Portfolio Composition
an Investment Firm Has Classified Its Clients According

question 111

Essay

Portfolio Composition
An investment firm has classified its clients according to their gender and the composition of their investment portfolio (primarily bonds,primarily stocks,or a balanced mix of bonds and stocks).The proportions of clients falling into the various categories are shown in the following table:
$$\begin{array}{l}\quad \quad \quad \quad \text { Partfolin Compasition }\\\begin{array} { | l | c | c | c | } \hline \text { Cender } & \text { Ennds } & \text { Stacks } & \text { Galanced } \\\hline \text { Mala } & 0.18 & 0.20 & 0.25 \\\hline \text { Female } & 0.12 & 0.05 & 0.20 \\\hline\end{array}\end{array}$$ One client is selected at random,and two events A and B are defined as follows:
A: The client selected is male.
B: The client selected has a balanced portfolio.
-Express each of the following probabilities in words:
A)P(A/B)
B)P(B/A)

• A)P(A/B)
• B)P(B/A)

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Definitions:

WACC

The Weighted Average Cost of Capital is a method of determining a corporation's cost of capital, with each capital category being weighted in accordance with its relative proportion.

IRR

Internal Rate of Return; a financial metric used to evaluate the profitability of potential investments, representing the discount rate that makes the net present value of all cash flows equal to zero.

Cash Flow

A measure of the amount of cash and cash-equivalents being transferred into and out of a business.

Project

An individual or collaborative enterprise planned and designed to achieve a specific goal.