An investor can design a risky portfolio based on two stocks, a and b. stock a has an expected return of 18% and a standard deviation of return of 20%. stock b has an expected return of 14% and a standard deviation of return of 5%. the correlation coefficient between the returns of a and b is .50. the risk-free rate of return is 10%. the proportion of the optimal risky portfolio that should be invested in stock a is

14%

Explanation:

Let b = standard deviation of B

      a = standard deviation of portfolio A

      r = the correlation coefficient of both portfolios

We shall then proceed by calculating the weights for the optimal risky portfolios as:

W1 =

=

W2 = 1- W1 = 1- (-0.07692)

       = 1 + 0.07692 = 1.07692

We shall then calculate the expected return for the optimal risky portfolio as

E(r) = W2R2 + W1R1

      = (1.07692*0.14) + (-0.07692 *0.18)

      =0.15076 -0.01384

       = 0.1369

         = 0.1369* 100 = 13.69%

          = 14%

in 2001, dell computer became the world’s largest personal computer vendor, continuing to

gain market share and post profits in an industry struggling with slumping sales and billions of

dollars in losses. dell sells 90% of its pcs directly to the final customer, largely bypassing the

reseller channel that accounts for most of the world’s pc sales. this direct customer relationship

is the key to dell’s business model, and provides distinct advantages over the indirect sales

model. dell’s direct relationship with the customer allows it to tailor its offerings to customer

needs, offer add-on products and services, and use the internet to offer a variety of customer

services. in addition, dell’s pcs are built to customers’ specifications upon receipt of an order,

giving dell additional advantages over indirect pc vendors who must try to forecast demand and

ship products based on those forecasts. dell’s direct sales and build-to-order model has achieved

superior performance in the pc industry in terms of inventory turnover, reduced overhead, cash

conversion, and return on investment (kraemer, et al., 2000).

explanation:

idk sorry

explanation: