Can I have the answer of question 1 to 5 with full step? Questions 1-7 refer to

Question

Can I have the answer of question 1 to 5 with full step?

Questions 1-7 refer to the following information Consider an asset universe containing only two risky securities and a risk-free security paving rpm 1%. The two risky securities are characterised by the following expected return variance-covariance matri 0.10) = (0.30 and =(0.00 0.40 Answer the following questions: 1-The value of the scalar A is closest to: (a). 106.25. (b). 12.50. (c). 4.74. (d). 0.50. 2. The value of the scalar B is closest to: (a). 2.25. (c). 0.79. (d). 0.13. 3. The expected return of the tangency portfolio is closest to: (a), 20.00%. (b). 18.92%. (c), 14.00%. (d). 13.26%. 4. The portfolio weights of the tangency portfolio are closest to: (a). (0.900, 0.725) (b). (0.837,0.163) (c). (0.800,0.200) (d). (0.554,0.446) 5. The amount of borrowing required (i.e., the weight in the risk-free asset) to obtain an efficient portfolio with 30% expected return is closest to (a). Io=-1.62. (b), to=-1.23. (c). To =-0.62. (d), zo= 0.00. Hint: The One Fund Theorem may be useful.

Explanation / Answer

Solution;-

Question 7). Answer :- Option C). all publicly available information.

Question 8). Answer :- Option E). Market.

Question 9). Answer :- Option A). Unexpected increase in the variable costs for a firm.

Question 10). Answer :- Option C). A portfolio comprised solely of U.S. treasury bills.

Question 11). Answer :- Option A). (-) $425.91

Explanation :- Net present value = Present value of cash inflows - Present value of initial cash outflow.

Present value of cash inflows = 811 / (1.112)1 + 924 / (1.112)2 + 638 / (1.112)3 + 510 / (1.12)4

= 811 / 1.112 + 924 / 1.2365 + 638 / 1.3750 + 510 / 1.5290

= 729.32 + 747.27 + 464 + 333.55

= $ 2274.14 (approx)

Present value of initial cash outflow = $ 2700 (Given in the question).

Accordingly, Net present value (NPV) of the project = 2274.14 - 2700 = (-) 425.86 [ Most nearest to (-) $ 425.91 mentioned in the option A to the given question.]

Note :- Net present value of project is negative, accordingly, project should not be accepted / considered for the investment opportunity.

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