Business Math (11th Edition)
11th Edition
ISBN: 9780134496436
Author: Cheryl Cleaves, Margie Hobbs, Jeffrey Noble
Publisher: PEARSON
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Chapter 8.3, Problem 14SE
To determine
To calculate: Thedue amount for an invoice paid by Harper Pastner on April15 for an invoice for
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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
frontier.
(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 8 Solutions
Business Math (11th Edition)
Ch. 8.1 - Prob. 1-1SCCh. 8.1 - Prob. 1-2SCCh. 8.1 - Prob. 1-3SCCh. 8.1 - Prob. 1-4SCCh. 8.1 - Prob. 1-5SCCh. 8.1 - Prob. 1-6SCCh. 8.1 - Prob. 2-1SCCh. 8.1 - Prob. 2-2SCCh. 8.1 - Prob. 2-3SCCh. 8.1 - Prob. 2-4SC
Ch. 8.1 - Prob. 1SECh. 8.1 - Prob. 2SECh. 8.1 - Prob. 3SECh. 8.1 - Prob. 4SECh. 8.1 - Prob. 5SECh. 8.1 - Prob. 6SECh. 8.1 - Prob. 7SECh. 8.1 - Prob. 8SECh. 8.1 - Prob. 9SECh. 8.1 - Prob. 10SECh. 8.1 - Prob. 11SECh. 8.1 - Prob. 12SECh. 8.1 - Prob. 13SECh. 8.2 - Prob. 1-1SCCh. 8.2 - Prob. 1-2SCCh. 8.2 - Prob. 1-3SCCh. 8.2 - Prob. 1-4SCCh. 8.2 - Prob. 1-5SCCh. 8.2 - Prob. 1-6SCCh. 8.2 - Prob. 2-1SCCh. 8.2 - Prob. 2-2SCCh. 8.2 - Prob. 2-3SCCh. 8.2 - Prob. 2-4SCCh. 8.2 - Prob. 2-5SCCh. 8.2 - Prob. 2-6SCCh. 8.2 - Prob. 1SECh. 8.2 - Prob. 2SECh. 8.2 - Prob. 3SECh. 8.2 - Prob. 4SECh. 8.2 - Prob. 5SECh. 8.2 - Prob. 6SECh. 8.2 - Prob. 7SECh. 8.2 - Prob. 8SECh. 8.2 - Prob. 9SECh. 8.2 - Prob. 10SECh. 8.2 - Prob. 11SECh. 8.2 - Prob. 12SECh. 8.3 - Prob. 1-1SCCh. 8.3 - Prob. 1-2SCCh. 8.3 - Prob. 1-3SCCh. 8.3 - Prob. 1-4SCCh. 8.3 - Prob. 1-5SCCh. 8.3 - Prob. 1-6SCCh. 8.3 - Prob. 1-7SCCh. 8.3 - Prob. 1-8SCCh. 8.3 - Prob. 1-9SCCh. 8.3 - Prob. 1-10SCCh. 8.3 - Prob. 2-1SCCh. 8.3 - Prob. 2-2SCCh. 8.3 - Prob. 2-3SCCh. 8.3 - Prob. 2-4SCCh. 8.3 - Prob. 2-5SCCh. 8.3 - Prob. 2-6SCCh. 8.3 - Prob. 3-1SCCh. 8.3 - Prob. 3-2SCCh. 8.3 - Prob. 3-3SCCh. 8.3 - Prob. 3-4SCCh. 8.3 - Prob. 4-1SCCh. 8.3 - Prob. 4-2SCCh. 8.3 - Prob. 4-3SCCh. 8.3 - Prob. 4-4SCCh. 8.3 - Prob. 5-1SCCh. 8.3 - Prob. 5-2SCCh. 8.3 - Prob. 5-3SCCh. 8.3 - Prob. 5-4SCCh. 8.3 - Prob. 1SECh. 8.3 - Prob. 2SECh. 8.3 - Prob. 3SECh. 8.3 - Prob. 4SECh. 8.3 - Prob. 5SECh. 8.3 - Prob. 6SECh. 8.3 - Prob. 7SECh. 8.3 - Prob. 8SECh. 8.3 - Prob. 9SECh. 8.3 - Prob. 10SECh. 8.3 - Prob. 11SECh. 8.3 - Prob. 13SECh. 8.3 - Prob. 14SECh. 8.3 - Prob. 15SECh. 8.3 - Prob. 16SECh. 8.3 - Prob. 17SECh. 8.3 - Prob. 18SECh. 8.3 - Prob. 19SECh. 8.3 - Prob. 20SECh. 8.3 - Prob. 21SECh. 8.3 - Prob. 22SECh. 8.3 - Prob. 23SECh. 8.3 - Prob. 24SECh. 8.3 - Prob. 25SECh. 8.3 - Prob. 26SECh. 8 - Prob. 1ESCh. 8 - Prob. 2ESCh. 8 - Prob. 3ESCh. 8 - Prob. 4ESCh. 8 - Prob. 5ESCh. 8 - Prob. 6ESCh. 8 - Prob. 7ESCh. 8 - Prob. 8ESCh. 8 - Prob. 9ESCh. 8 - Prob. 10ESCh. 8 - Prob. 11ESCh. 8 - Prob. 12ESCh. 8 - Prob. 13ESCh. 8 - Prob. 14ESCh. 8 - Prob. 15ESCh. 8 - Prob. 16ESCh. 8 - Prob. 17ESCh. 8 - Prob. 18ESCh. 8 - Prob. 19ESCh. 8 - Prob. 20ESCh. 8 - Prob. 21ESCh. 8 - Prob. 22ESCh. 8 - Prob. 23ESCh. 8 - Prob. 24ESCh. 8 - Prob. 25ESCh. 8 - Prob. 26ESCh. 8 - Prob. 27ESCh. 8 - Prob. 28ESCh. 8 - Prob. 29ESCh. 8 - Prob. 30ESCh. 8 - Prob. 31ESCh. 8 - Prob. 32ESCh. 8 - Prob. 33ESCh. 8 - Prob. 34ESCh. 8 - Prob. 35ESCh. 8 - Prob. 36ESCh. 8 - Prob. 37ESCh. 8 - Prob. 38ESCh. 8 - Prob. 39ESCh. 8 - Prob. 40ESCh. 8 - Prob. 41ESCh. 8 - Prob. 42ESCh. 8 - Prob. 43ESCh. 8 - Prob. 44ESCh. 8 - Prob. 45ESCh. 8 - Prob. 46ESCh. 8 - Prob. 47ESCh. 8 - Prob. 48ESCh. 8 - Prob. 49ESCh. 8 - Prob. 50ESCh. 8 - Prob. 51ESCh. 8 - Prob. 52ESCh. 8 - Prob. 53ESCh. 8 - Prob. 54ESCh. 8 - Prob. 55ESCh. 8 - Prob. 56ESCh. 8 - Prob. 57ESCh. 8 - Prob. 58ESCh. 8 - Prob. 59ESCh. 8 - Prob. 60ESCh. 8 - Prob. 61ESCh. 8 - Prob. 62ESCh. 8 - Prob. 63ESCh. 8 - Prob. 64ESCh. 8 - Prob. 1PTCh. 8 - Prob. 2PTCh. 8 - Prob. 3PTCh. 8 - Prob. 4PTCh. 8 - Prob. 5PTCh. 8 - Prob. 6PTCh. 8 - Prob. 7PTCh. 8 - Prob. 8PTCh. 8 - Prob. 9PTCh. 8 - Prob. 10PTCh. 8 - Prob. 11PTCh. 8 - Prob. 12PTCh. 8 - Prob. 13PTCh. 8 - Prob. 14PTCh. 8 - Prob. 15PTCh. 8 - Prob. 16PTCh. 8 - Prob. 17PTCh. 8 - Prob. 18PTCh. 8 - Prob. 19PTCh. 8 - Prob. 20PTCh. 8 - Prob. 21PTCh. 8 - Prob. 22PTCh. 8 - Prob. 1CTCh. 8 - Prob. 2CTCh. 8 - Prob. 3CTCh. 8 - Prob. 4CTCh. 8 - Prob. 5CTCh. 8 - Prob. 6CTCh. 8 - Prob. 7CTCh. 8 - Prob. 8CTCh. 8 - Prob. 9CTCh. 8 - Prob. 10CTCh. 8 - Prob. 11CTCh. 8 - Prob. 1CPCh. 8 - Prob. 2CPCh. 8 - Prob. 1CS1Ch. 8 - Prob. 2CS1Ch. 8 - Prob. 3CS1Ch. 8 - Prob. 4CS1Ch. 8 - Prob. 1CS2Ch. 8 - Prob. 2CS2Ch. 8 - Prob. 3CS2Ch. 8 - Prob. 4CS2Ch. 8 - Prob. 1CS3Ch. 8 - Prob. 2CS3Ch. 8 - Prob. 3CS3Ch. 8 - Prob. 4CS3Ch. 8 - Prob. 5CS3
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