Practical Business Math Procedures
12th Edition
ISBN: 9781259540554
Author: Jeffrey Slater, Sharon Wittry
Publisher: McGraw-Hill Education
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Chapter 13, Problem 4PT
To determine
The amount that Rollo Company has to pay in order to have an amount of
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29% of all college students major in STEM (Science, Technology, Engineering, and Math). If 46 college students are randomly selected, find the probability thata. Exactly 11 of them major in STEM. b. At most 12 of them major in STEM. c. At least 11 of them major in STEM. d. Between 11 and 15 (including 11 and 15) of them major in STEM.
4. Assume that a risk-free money market account is added to the market described in Q3.
The continuously compounded rate of return on the money market account is log (1.1).
(i) For each given μ, use Lagrange multipliers to determine the proportions (as a
function of μ) of wealth invested in the three assets available for the minimum
variance portfolio with expected return μ.
(ii) Determine the market portfolio in this market and calculate its Sharp ratio.
3. A market consists of two risky assets with rates of return R₁ and R2 and no risk-free
asset. From market data the following have been estimated: ER₁ = 0.25, ER2 = 0.05,
Var R₁ = 0.01, Var R2 = 0.04 and the correlation between R1 and R2 is p = -0.75.
(i) Given that an investor is targeting a total expected return of μ = 0.2. What
portfolio weights should they choose to meet this goal with minimum portfolio
variance? Correct all your calculations up to 4 decimal points.
(ii) Determine the global minimum-variance portfolio and the expected return and
variance of return of this portfolio (4 d.p.).
(iii) Sketch the minimum-variance frontier in the μ-σ² plane and indicate the efficient
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(iv) Without further calculation, explain how the minimum variance of the investor's
portfolio return will change if the two risky assets were independent.
Chapter 13 Solutions
Practical Business Math Procedures
Ch. 13.1 - Using Table 13.1, (a) find the value of an...Ch. 13.1 - Prob. 2PQCh. 13.1 - Prob. 1EPQCh. 13.1 - Prob. 2EPQCh. 13.1 - Prob. 1AHCh. 13.1 - Prob. 2AHCh. 13.1 - Prob. 3AHCh. 13.1 - Prob. 4AHCh. 13.1 - Prob. 5AHCh. 13.1 - Prob. 6AH
Ch. 13.1 - Prob. 7AHCh. 13.1 - Prob. 8AHCh. 13.1 - Prob. 9AHCh. 13.1 - Prob. 10AHCh. 13.1 - Prob. 11AHCh. 13.2 - Prob. 1PQCh. 13.2 - Prob. 2PQCh. 13.2 - Prob. 3PQCh. 13.2 - Prob. 1EPQCh. 13.2 - Prob. 2EPQCh. 13.2 - Prob. 3EPQCh. 13.2 - Prob. 1AHCh. 13.2 - Prob. 2AHCh. 13.2 - Prob. 3AHCh. 13.2 - Prob. 4AHCh. 13.2 - Prob. 5AHCh. 13.2 - Prob. 6AHCh. 13.2 - Prob. 7AHCh. 13.2 - Prob. 8AHCh. 13.2 - Prob. 9AHCh. 13.2 - Prob. 10AHCh. 13.2 - Prob. 11AHCh. 13.2 - Prob. 12AHCh. 13.3 - Prob. 1PQCh. 13.3 - Prob. 1EPQCh. 13.3 - Prob. 1AHCh. 13.3 - Prob. 2AHCh. 13.3 - Prob. 3AHCh. 13.3 - Arlex Oil Corporation plans to build a new garage...Ch. 13.3 - The City Fisheries Corporation sold $300,000 worth...Ch. 13.3 - Prob. 6AHCh. 13.3 - Prob. 7AHCh. 13.3 - The Lowest-Price-in-Town Company needs $75,500 in...Ch. 13.3 - Prob. 9AHCh. 13 - Prob. 1ECPCh. 13 - Prob. 2ECPCh. 13 - Prob. 3ECPCh. 13 - Prob. 4ECPCh. 13 - Prob. 5ECPCh. 13 - Prob. 6ECPCh. 13 - Prob. 7ECPCh. 13 - Prob. 8ECPCh. 13 - Prob. 9ECPCh. 13 - Check the answer in Problem 13–9 by Table 13.1. LU...Ch. 13 - Prob. 11ECPCh. 13 - Ed Long promised to pay his son $400 semiannually...Ch. 13 - Prob. 13ECPCh. 13 - Prob. 14ECPCh. 13 - Prob. 15ECPCh. 13 - Prob. 16ECPCh. 13 - Prob. 17ECPCh. 13 - Prob. 18ECPCh. 13 - Prob. 19ECPCh. 13 - Prob. 20ECPCh. 13 - Prob. 21ECPCh. 13 - Prob. 22ECPCh. 13 - Prob. 23ECPCh. 13 - You are earning an average of $46,500 and will...Ch. 13 - Prob. 25ECPCh. 13 - Prob. 26ECPCh. 13 - A1 Vincent has decided to retire to Arizona in 10...Ch. 13 - Prob. 28ECPCh. 13 - Prob. 29ECPCh. 13 - Prob. 30ECPCh. 13 - Prob. 31ECPCh. 13 - Prob. 1PTCh. 13 - Prob. 2PTCh. 13 - Prob. 3PTCh. 13 - Prob. 4PTCh. 13 - Prob. 5PTCh. 13 - Prob. 6PTCh. 13 - Twice a year for 15 years, Warren Ford invested...Ch. 13 - Scupper Molly invested $1,800 semiannually for 23...Ch. 13 - Prob. 9PTCh. 13 - Prob. 10PTCh. 13 - Prob. 1CRCh. 13 - Prob. 2CRCh. 13 - Prob. 3CRCh. 13 - Prob. 4CRCh. 13 - Prob. 5CRCh. 13 - Prob. 6CRCh. 13 - Prob. 7CRCh. 13 - Prob. 8CR
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