Chapter 6 TemplatesPage 184The following figure shows plots of monthly rates of return and the stock market for two stocks. (LO 6-5)a. Which stock is riskier to an investor currently holding a diversified portfolio of common stock?b. Which stock is riskier to an undiversified investor who puts all of his funds in only one of these stocks?Templates and spreadsheets are available in Connectmheducation.com/parser php?secload36.f&fake&print

Diversification is the strategy to minimize loss by invest money in several securities through…

Page 184 The following figure shows plots of monthly rates of return and the stock market for two stocks. (LO 6-5) a. Which stock is riskier to an investor currently holding a diversified portfolio of common stock? . Which stock is riskier to an undiversified investor who puts all of his funds in only one of these stocks? emplates and spreadsheets are available in Connect education.com/parser.php?secload=6.f&fake&print

Page 184 The following figure shows plots of monthly rates of return and the stock market for two stocks. (LO 6-5) a. Which stock is riskier to an investor currently holding a diversified portfolio of common stock? . Which stock is riskier to an undiversified investor who puts all of his funds in only one of these stocks? emplates and spreadsheets are available in Connect education.com/parser.php?secload=6.f&fake&print

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Economics Annual premiums are paid into a 3 year unit linked endowment policy where 98% of each premium is allocated to units in a fund that carries a 3% bid- offer spread and charges management fees of 0.75% of assets at the end of each policy year. The policy has a death benefit of the bid value of units payable at the end of the year of death subject to a minimum of £12,500. The survival benefit is the bid value of units at the end of the term. The life assurance company estimates that expenses are £95 per policy per year. (a) Produce projected revenue accounts for each year of a policy with an annual premium of £5,000 assuming the annual rate of mortality is 0.00498, an investment return of 6.9% per annum and an interest rate on cash balances of 3% per annum. (b) Does the life assurance company meet its internal profit margin objective of 5% on this policy if its risk discount rate is 5.5% per annum?
Appledale Dairy is considering upgrading an old ice-cream maker. Upgrading is available at two levels: moderate and extensive. Moderate upgrading costs $6,900 now and yields annual savings of $3,600 in the first year, $3,250 in the second year, $2,900 in the third year, and so on. Extensive upgrading costs $10,550 and saves $7,700 in the first year. The savings then decrease by 20 percent each year thereafter. If the upgraded ice-cream maker will last for seven years, which upgrading option is better? Use a present worth comparison. Appledale's MARR is 5 percent. Click the icon to view the table of compound interest factors for discrete compounding periods when i = 5%. The present worth of the moderate upgrading option is $ and the present worth of the extensive upgrading option is $ The V upgrading option is better. (Round to the nearest cent as needed.)
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3
A 33.