Most assets show slight degree of negative correlation

Assignment Help Financial Management
Reference no: EM131317132

True or False: Please explain.

1) If the risk-free rate of return is less than the inflation rate, the real rate of return is negative.

2) If the actual rate of return on an investment portfolio is constant from year to year, the standard deviation of that portfolio is zero.

3) Most assets show a slight degree of negative correlation.

Reference no: EM131317132

Questions Cloud

Discuss the supply chain integration of the organization : For this first SLP paper you should discuss the structure of this organization and its supply chain integration in 4 pages (not including the cover sheet or reference page).
Determine the current value of the bond : Ashlor Corporation has a bond issue outstanding with a 7% coupon, semiannual payments, and 4 years remaining until maturity. The par value of the bond is $1,000. Determine the current value of the bond if present market conditions justify a 14% requi..
Statements about the standard deviation : Which of the following statements about the standard deviation are correct? Which one of the following indexes reflects a large sample of small, medium sized and large companies?
Create a report card for a specific coral reef : Create a Report Card for a specific coral reef, indicating the threats, hypothetical or documented causes, and interventions that might be possible
Most assets show slight degree of negative correlation : If the risk-free rate of return is less than the inflation rate, the real rate of return is negative. If the actual rate of return on an investment portfolio is constant from year to year, the standard deviation of that portfolio is zero. Most assets..
Investment decision rules adjusts for time value of money : Which of the following investment decision rules adjusts for the time value of money? Camille purchased a bond 5 years ago for $1,050. The bond paid $50 in annual interest and returned the $1,000 principal at the end of the fifth year. Camille used t..
Narrowed the decision down to two potential targets : TCG plans to acquire a sports media company. TCG has narrowed the decision down to two potential targets. Assuming that the acquisition is a mutually exlusive project, which decision rule enables TCG to rank the companies and choose the best one?
Discuss about evaluation of thematic development : Acts 1:8 serves as the key verse of the book.Jesus' words give an "inspired outline" for Acts, as the witnessing mission is launched in Jerusalem (Acts 1-7), spreads throughout Judea and Samaria (Acts 8-12), and then advances across the Mediterran..
The new app will generate incremental cash flows : Dave is considering investing in a new app for his mobile website. The initial cost is $100,000. However, Dave believes that the new app will generate more page views and thus more advertising revenue. He predicts that the new app will generate incre..

Reviews

Write a Review

Financial Management Questions & Answers

  Expected return on any asset is dependent upon its beta

The expected return on any asset is dependent upon its beta. Explain what Beta is, why it is used and its relevance to investment decisions.

  What is the present value of the tax shield to a firm

What is the present value of the tax shield to a firm that has a capital structure consisting of $100million of perpetual debt and $180 million of equity, if then average interest rate on debt is 9%, the return on equity is 13%, and the marginal tax ..

  Assume there is no prepayment and no servicing fees

Given the following information, what is the total cash flow to Class A investors in year 1? A CMO is being issued with 3 tranches. The A tranche will consist of $20M of principal and have a coupon of 7%. The B tranche will have a coupon of 7.5% and ..

  Strike price and expiration date as for the call option

The current price of a stock is $45, the annual risk-free rate is 6%, and a 1-year call option with a strike price of $60 sells for $7.20. What is the value of a put option, assuming the same strike price and expiration date as for the call option, a..

  The investor uses straight line depreciation

Assume that an investor acquired a property 5 years ago at a cost of $ 200000. The property was 15 years old at the time of purchase and was financed with a 75% mortgage at 11% interest for 25 years. The investor uses a straight line depreciation wit..

  Analyzes project that requires an immediate outflow

The Allied Corporation analyzes a project that requires an immediate outflow (an initial investment) of $455. Allied estimates that at the end of the first year the project will generate a positive cash flow of $660, but that at the end of the second..

  Value bel vino and starshine using market multiples

What are some key financial differences between the three companies in the simulations? What primary advantages does your company bring to the table in a potential merger or acquisition? What sources of synergy are possible in your two potential tran..

  Contemplating replacing current fleet of delivery vehicles

Your company is contemplating replacing their current fleet of delivery vehicles with Nissan NV vans. You will be replacing 5 fully-depreciated vans, which you think you can sell for $3,800 apiece and which you could probably use for another 2 years ..

  What happens to the present value of a cash-flow stream

What happens to the present value of a cash-flow stream when the discount rate increases? Place this in the context of an investment. If the required return on an investment goes up but the expected cash flows do not change, would you be willing to p..

  Manager is saying the firm is undervalued or overvalued

A manager believes his firm will earn a 11.50 percent return next year. His firm has a beta of 1.40, the expected return on the market is 9.0 percent, and the risk-free rate is 4.0 percent. Compute the return the firm should earn given its level of r..

  What is the smallest expected loss for your portfolio

Your portfolio allocates equal funds to the DW Co. and Woodpecker, Inc. DW Co. stock has an annual return mean and standard deviation of 11 percent and 34 percent, respectively. Woodpecker, Inc., stock has an annual return mean and standard deviation..

  Replaced to get the current ratio to the target level

Muscarella Inc. has the following balance sheet and income statement data: Cash $ 14,000 Accounts payable $ 42,000 Receivables 70,000 Other current liabilities 28,000 Inventories 210,000 Total CL $ 70,000 Total CA $294,000 Long-term debt 70,000. Assu..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd