1. You have been asked to determine the cash flow from the assets for ABC Inc. ABC had net income of $100. Its interest expense was $20. The company’s tax rate was 40%. ABC’s capital spending and depreciation was $10. The company’s net working capital for the year did not change.
a) $ 60.00
b) $166.67
c) $120.00
d) $170.00
e) none of the above
Is the answer net income + net capital spending (increase in assets + depreciation) ?
What about the other numbers. I don't think that formula fits in to CFFA = OCF - Change NCS - Change in NWC
2. The risk-free rate is 4%. The expected return on the market is 10%. The standard deviation of the market portfolio is 25%. What is the standard deviation of a portfolio composed of 30% of the risk-free asset and 70% of the market portfolio?
a) 7%
b) 8.2%
c) 12.5%
d) 17.5%
e) 25.0%
This question I just don't understand. I don't know how to use standard deviation with expected returns and portfolio weights. Please help.
a) $ 60.00
b) $166.67
c) $120.00
d) $170.00
e) none of the above
Is the answer net income + net capital spending (increase in assets + depreciation) ?
What about the other numbers. I don't think that formula fits in to CFFA = OCF - Change NCS - Change in NWC
2. The risk-free rate is 4%. The expected return on the market is 10%. The standard deviation of the market portfolio is 25%. What is the standard deviation of a portfolio composed of 30% of the risk-free asset and 70% of the market portfolio?
a) 7%
b) 8.2%
c) 12.5%
d) 17.5%
e) 25.0%
This question I just don't understand. I don't know how to use standard deviation with expected returns and portfolio weights. Please help.