Assume that the returns from an asset are normally distributed. The average annual return for this asset over a specific period was 13.6 percent and the standard deviation of those returns in this period was 43.86 percent. a. What is the approximate probability that your money will double in value in a single year? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What about triple in value? (Do not round intermediate calculations and enter your answer as a percent rounded to 6 decimal places, e.g., .161616.)
Answers
Answer: a. 2.44%
b. 0.001070%
Explanation:
Given: The returns from an asset are normally distributed with
Let x be the percentage value of return.
a. Double in value in a single year i.e. 100% return.
z-value =
Required probability = Right-tailed probability for Z = 1.97
= 0.0244 [By p-value calculator]
= 2.44%
b. Triple in value in a single year i.e. 200% return.
z-value =
Required probability = Right-tailed probability for Z =4.25
= 0.0000107 [By p-value calculator]
= 0.001070%
Related Questions
Messersmith Company is constructing a building. Construction began in 2017 and the building was completed 12/31/17. Messersmith made payments to the construction company of $3,000,000 on 7/1, $6,300,000 on 9/1, and $6,000,000 on 12/31. Weightedaverage accumulated expenditures werea. $3,075,000.b. $3,600,000.c. $9,300,000.d. $15,300,000.
Raw materials inventory was $27,000 at the beginning of the year and $25,000 at the end of the year. During the year, $100,000 in raw materials were purchased, including $28,000 of indirect materials that were put into manufacturing overhead during the period. Calculate the cost of direct materials used during the period. a. $130,000 b. $70,000 c. $74,000 d. $102,000
According to the quantity equation, the price level would change less than proportionately with a rise in the money supply if there were also
ImpressMe Products embosses notebooks with school and corporate logos. Last year, the company’s direct labor payroll totaled $352,100 for 50,300 direct labor hours. The standard wage rate is $6.75 per direct labor hour. Calculate ImpressMe’s direct labor rate variance. (Round answer to 0 decimal places, e.g. 125. If variance is zero, select "Not Applicable" and enter 0 for the amounts.)
b. real wages will have fallen
c. nominal and real wages will have changed by the same percentage.
d. real wages will be lower than was expected.
Answers
Answer:
The correct option is (d)
Explanation:
Real wages are nominal wages less inflation. Nominal wage is not adjusted for inflation. Everyone had expected an inflation of 3% per year while increase in wages per year is 5%. This implied that they will expect real wage of 2% (5% - 3%) per year.
However, it turned out that inflation was 5% per year. This means that real wages were actually 0% (5% - 5%). There was no increase in real wages at all. So, they received lower real wage (actually nil) as against expected real wage of 3% per year.
Answers
Answer:
$117,000
Explanation:
Manufacturing overhead is also known as the production overhead. It can be estimated by the adding the variable manufacturing overhead to the fixed manufacturing overhead. Therefore:
Fixed manufacturing overhead is equivalent to the cost of the fixed units (i.e. 15,000 units) = $4*15000 = $60000
Variable manufacturing overhead is equivalent to the cost of the variable units (i.e. 19000 units) = $3*19000 = $57000
Total manufacturing overhead = $60000 + $57000 = $117000
the law in pursuit of free music. In reality hardcore fans "are extremely enthusiastic about paid-for services, as long as they are suitably compelling, he said.
People who download unlicensed music tend not buy legal digital music.
A True
B False
C Cannot Say
Answers
The answer to the prompt that "People who download unlicensed music tend not buy legal digital music" is False.
Judging from the passage above, the answer to this prompt is false.
The passage makes it clear that those who regularly downloaded unlicensed music also "spent an average of £5.52 a month on legal digital music."
This shows that this crop of individuals are willing to purchase legal digital music.
Learn more about unlicensed music here:
A.
14.4 percent
B.
10.0 percent
C.
13.6 percent
D.
11.5 percent Please show work
Answers
Answer:
C. 13.6 percent
Explanation:
In this question, we apply the Capital Asset Pricing Model (CAPM) formula which is shown below
Expected rate of return = Risk-free rate of return + Beta × risk-free rate of return + Beta × market risk premium
= 4% + 0.6 × 4% + 1.2 × 6%
= 4% + 2.4% + 7.2%
= 13.6%
The (Market rate of return - Risk-free rate of return) is also known as market risk premium
Answers
Answer:
a. estimate the cost of inventory from incomplete records.
Explanation:
The gross profit method is used to estimate the cost of inventory from incomplete records. This is done by determining the amount of gross profit using the Sales Revenue and the Gross Profit Margin. Then finding the difference between the Cost of Goods available for sale and this Gross Profit to reach to the estimated cost of inventory.
b. If production on a batch begins when there is no inventory of heating elements on hand, how much inventory will be on hand 2 days later? Number of inventory
c.What is the average inventory of elements, assuming each production cycle begins when there are none on hand? (Do not round intermediate calculations. Round your answer to the nearest whole number.) Average inventory
d. The same equipment that is used to make the heating elements could also be used to make a component for another of the firm’s products. That job would require 3 days, including setup. Setup time for making a batch of the heating elements is a half day. Is there enough time to do this job between production of batches of heating elements?
i. No
ii. Yes
Answers
Answer:
(a) 93.85 batches of heating elements are produced annually
(b) 1725
(c) 863
(d) Yes
Explanation:
(a) Daily production rate is 860 units
Annual (251 days) production rate is = 251×860 = 215860 units
In a batch, 2300 units are produced
215860 units are produced in (215860 ÷ 2300) = 93.85 batches
(b) In 251 days, 93.85 batches are produced
In 2 days, (93.85×2)÷251 is produced = 0.75 batch
1 batch = 2300 units
0.75 batch = 0.75×2300=1725 units
(c) 0.75 batch is produced in 2days
1 batch is produced in 2/0.75days
Average= (2300×0.75)÷2= 863
Final answer:
The company produces approximately 93.85 batches of heating elements annually, has an inventory of 1,060 units two days after production, and maintains an average inventory of 1,150 units. Furthermore, there is enough time to produce other products between batches of heating element production.
Explanation:
To solve this problem, we first need to understand the company's production and consumption rates of the heating elements for their hair dryers.
a. The company produces elements at a rate of 860 per day and runs 251 days per year. Thus, they produce around 215,860 elements annually. As they produce elements in batches of 2,300, the number of batches produced annually will be 215,860 divided by 2,300, which is approximately 93.85. So, the company produces about 93.85 batches of heating elements annually.
b. Two days after the production of a batch, the company will have produced 2 * 860 = 1,720 elements but used 2 * 330 = 660, thus having an inventory of 1,060 units.
c. To calculate the average inventory, we take the sum of the maximum and minimum inventory (2,300 and 0, respectively) and divide by 2, leading to an average inventory of 1,150 units.
d. The time between production of batches of heating elements is the total quantity in a batch divided by the net increase per day (860-330). This equals 2,300/(860-330) approximately 4.8 days. Given that the other product takes 3 days to make, including setup, there is enough time to produce it between batches of heating elements.
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