BUSS1000 (BUSS1000)

The following portfolios are plotted in the risk-return space: A B C D E F G H I E(r)(%) 4.25 5 6.25 7.75 8.25 8.75 9.5 9.5 11.25 SD (%) 12.25 11.5 10.5 12.5 14.5 14.5 16 17.5 21 (a) Which of these portfolios are inefficient?

The following portfolios are plotted in the risk-return space: A B C D E F G H I E(r)(%) 4.25 5 6.25 7.75 8.25 8.75 9.5 9.5 11.25 SD (%) 12.25 11.5 10.5 12.5 14.5 14.5 16 17.5 21 (a) Which of these portfolios are efficient?

Given the following information: State of economy Probility of state Return - East Ltd Return - West Ltd Recession 20% 2% −30% Normal 60% 7% 18% Boom 20% 15% 30% Calculate the standard deviation for a portfolio consisting of 60% in East Ltd and the remainder in West Ltd. A. 10.52% B. 10.87% C. 11.09% D. 12.29% E. Cannot be calculated with the information provided

There are two states in the economy: good and bad with equal probability of occurrence. You have a choice of two investments X and Y . Investment X will earn you $5 from a $100 investment irrespective of economic conditions whilst Investment Y will earn you $10 in the good state but nothing in the bad state. Which investment would you prefer and why? A. Investment X because you will earn the same returns as Investment Y but with lower risk B. Neither X nor Y C. Investment Y because it has lower risk D. Both X and Y are equally acceptable E. Investment Y because you will earn higher returns in the good state Solution: Expected returns are the same: E (r X ) = 0.05, E (r Y ) = (0.10 × 0.5) + (0 × 0.5) = 0.05

There are two states in the economy: good and bad with equal probability of occurrence. You have a choice of two investments X and Y . Investment X will earn you $5 from a $100 investment irrespective of economic conditions whilst Investment Y will earn you $10 in the good state but nothing in the bad state. Which investment would you prefer and why? A. Investment X because you will earn the same returns as Investment Y but with lower risk B. Neither X nor Y C. Investment Y because it has lower risk D. Both X and Y are equally acceptable E. Investment Y because you will earn higher returns in the good state

JJ Ltd purchases a printing machine on 1 January 2022 for a cost of $372,000 with a useful life of 12 years, and a residual value of $24,000. Six months later an extra feeder is installed on the machine for a cost of $32,000. What is the revised annual depreciation expense after the feeder has been installed? Assume no change to residual value or useful life. Group of answer choices $30,458 $29,000 $31,667 $31,783