Assume There Is a Fixed Exchange Rate Between the Swiss

question 39

Multiple Choice

Assume there is a fixed exchange rate between the Swiss Franc and U.S. dollar. The expected return and standard deviation of return on the U.S. stock market are 14% and 11%, respectively. The expected return and standard deviation on the Swiss Stock Exchange (SIX) are 9% and 14%, respectively. The covariance of returns between the U.S. and the SIX is 1.75%.
If you invested 350% of your money in the Swiss (SIX) stock market and 65% in the U.S. stock market, the expected return on your portfolio would be

• A) 12.25%.
• B) 12.5%.
• C) 13.0%.
• D) 13.5%.

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Definitions:

Equivalent Units

A technique in process costing that equates partially finished goods to a specific number of fully completed goods.

Shaping Department

A specialized division in manufacturing focused on altering raw materials into desired forms through processes like cutting, bending, or molding.

Cost Reconciliation Report

A financial document used to compare and reconcile the costs incurred with the costs allocated to products or services, often in process costing systems.

Work in Process Inventory

The cost of unfinished goods in the manufacturing process at a specific point in time.