Your friend claims that he has invested in stocks and bonds. As a budding economist, would...
Your friend claims that he has invested in stocks and bonds. As a budding economist, would you agree/disagree with your friend's claim? Support your answer with a brief ( 2-3 LINES ONLY)explanation.
Homework Answers
Yes, I would agree, the stocks and the bonds are different. The stock of the firm represents the ownership of the company, and this carries the ownership interest. While the bonds are the instruments that promises to pay back the money with the interest, the bonds does not reflect the ownership right of the company. For bonds the return is guaranteed and for the stocks it is not, the stocks provides the voting rights in the company and while the bonds do not.
The stocks represents the ownership, the bond represents the debt. Investors will try to diversify their portfolio with investing in stocks and bonds.
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Your friend claims that he has invested in stocks and bonds. As
a budding economist, would...
Exercise 5 Your financially unsophisticated friend has invested all of his $10,000 savings into Apple stocks....
Exercise 5 Your financially unsophisticated friend has invested all of his $10,000 savings into Apple stocks. He recently heard of a concept called diversification that might help him reduce the risk of his investment. He is considering selling $2,000 of Apple stocks and investing this amount into stocks of Allstate. As he is unsure about the risk implications of this move, he asks you to determine the fraction by which he could reduce his total return volatility if he indeed...
You own a portfolio that has $3,900 invested in stocks and $6,800 invested in bonds. What...
You own a portfolio that has $3,900 invested in stocks and $6,800 invested in bonds. What is the expected return of the portfolio if stocks and bonds are expected to yield a return of 3% and 3%, respectively? (Round your answer to 2 decimal places.) Expected return
You own a portfolio that has $3.800 invested in stocks and $5,700 invested in bonds. What...
You own a portfolio that has $3.800 invested in stocks and $5,700 invested in bonds. What is the expected return of the porfolio if stocks and bonds are expected to yield a return of 11% and 9%, respectively? (Round your answer to 2 decimal places.) Expected return
You own a portfolio that has $4,800 invested in stocks and $4,800 invested in bonds. What...
You own a portfolio that has $4,800 invested in stocks and $4,800 invested in bonds. What is the expected return of the portfolio if stocks and bonds are expected to yield a return of 7% and 6%, respectively? (Round your answer to 2 decimal places.) Expected Return?
Your friend claims to have more significant results than you because their group had, on average,...
Your friend claims to have more significant results than you because their group had, on average, fewer cavities. You claim that their results were not significant at the .05 level, even though their study had fewer cavities, on average. Complete a 6-step hypothesis test, using your friend's results, that the Oral-B 3D toothbrush combats tooth decay at the .05 level of significance. Your best friend would like to attend dental school, and wants to study the effects of using the...
An economist claims that he has found evidence to support the assumption that the investment expenditure...
An economist claims that he has found evidence to support the assumption that the investment expenditure increases with Y. More specifically, I relies on both r and Y, and: I(r,Y) = Ye^-r -r 1. Derive the government-purchase multiplier under this new assumption. (Recall that in the Keynesian cross model, r is fixed, but Y is endogenous.) 2. Derive the taxation multiplier under this new assumption.
Assume your portfolio’s initial asset allocation was 40% to bonds and 60% to stocks. You invested...
Assume your portfolio’s initial asset allocation was 40% to bonds and 60% to stocks. You invested 100,000$. After 3 years, stocks went up by 50% and the bonds by 20%. a. Calculate your portfolio’s asset allocation after 3 years. b. Calculate and explain how to rebalance your portfolio.
A broker deals only in stocks, bonds and commodities. He has 35 clients that own stocks,...
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A good friend of yours has asked for some advice on workplace harassment. Your friend is...
A good friend of yours has asked for some advice on workplace harassment. Your friend is a female kindergarten teacher at the local elementary school. According to her, the current principal’s practices are extraordinarily unfair and potentially discriminatory. She shares with you that this principal often threatens teachers with a classroom grade change when they don’t agree with him. Your friend reminds you that teachers are responsible for personally purchasing everything in their classrooms other than the desks and that...
Your friend would like to practice yoga, but he feels he does not have enough self-efficacy...
Your friend would like to practice yoga, but he feels he does not have enough self-efficacy to join a yoga class. He approaches you to help him build his self-efficacy to practice yoga. Please describe what self-efficacy is and provide a step-by-step plan for how you can help your friend build self-efficacy. Make sure to provide thorough and salient examples to support your answer.
Exercise 5 Your financially unsophisticated friend has invested all of his $10,000 savings into Apple stocks. He recently heard of a concept called diversification that might help him reduce the risk of his investment. He is considering selling $2,000 of Apple stocks and investing this amount into stocks of Allstate. As he is unsure about the risk implications of this move, he asks you to determine the fraction by which he could reduce his total return volatility if he indeed...
You own a portfolio that has $3,900 invested in stocks and $6,800 invested in bonds. What is the expected return of the portfolio if stocks and bonds are expected to yield a return of 3% and 3%, respectively? (Round your answer to 2 decimal places.) Expected return
You own a portfolio that has $3.800 invested in stocks and $5,700 invested in bonds. What is the expected return of the porfolio if stocks and bonds are expected to yield a return of 11% and 9%, respectively? (Round your answer to 2 decimal places.) Expected return
A broker deals only in stocks, bonds and commodities. He has 35 clients that own stocks, 28 that own bonds, 20 that own commodities; 11 own stocks and bonds; 9 own stocks and commodities; 8 own bonds and commodities; 3 own all three, and 12 have no investments. One of his clients is chosen randomly. What is the probability that this client a) owns only one investment instrument? b) owns at least two investment instruments?
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