Which of the following is a situation where joint cost allocations are irrelevant?
Question 5 options:
a. Inventory valuation
b. Insurance settlement cost information requirement
c. or process further decisions
d. Cost of goods sold computations
Answers
The right answer is B. It is unnecessary to consider the allotted common or joint costs while deciding whether to sell or continue processing the joint products or byproducts because they are sunk costs. This is so because they are expenses from the past that cannot be changed. Therefore, it is necessary to ignore the combined costs when computing.
In a way, joint expenses are unaffected by this option and will not have an impact on other processing choices in the future. Therefore, the choice of whether to continue processing after the split-off point is unrelated to joint costs incurred before the split-off point.
Sunk expense - Sunk costs are one type of irrelevant expense. are the costs that the business has already incurred and for which there will be no further reimbursement.
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Related Questions
list the 3 types of resume format
Answers
Answer:
Explanation:
chronological, functional, and combination.
hope i helped.
8. Discuss the risks a business faces when attempting to increase the profit margin of
a commodity
Answers
Answer:
There are major risks when a company attempts to increase the profit margin of a commodity, first if you buy from a cheaper vendor the quality of your commodity will drop affecting the number you sell on average, But if you raise the costs too much then there is the possibility people would be deterred by the cost.
If you increase the costs too much then there is the possibility people would be demoralized by the cost.
What a is the Margin of Commodity?
There are significant risks when a company endeavors to increase the profit margin of a commodity,
foremost, if you buy from a more affordable vendor the quality of your commodity will decline affecting the numeral you sell on average,
So, Therefore, if you raise the costs too much then there is the possibility people would be discouraged by the cost.
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discuss the following ways of adapting to the challenges of the business environments:Lobbying
Answers
Answer:
Accept that change is inevitable in business.
Explanation:
Change is bound to happen, especially if you work in a field that is quickly growing and adapting, like technology.
In fragmented markets, marketplaces extend the value chain by connecting suppliers and customers through all of the following EXCEPT:
Answers
In fragmented markets, marketplaces extend the value chain by connecting suppliers and customers through all of the following EXCEPT Physical distribution centers.
In fragmented markets, marketplaces typically extend the value chain by connecting suppliers and customers through various means such as online platforms, digital marketplaces, e-commerce websites, and mobile applications. These platforms facilitate the exchange of goods and services between suppliers and customers. However, physical distribution centers are not typically involved in connecting suppliers and customers in fragmented markets. Instead, they are primarily responsible for the storage, sorting, and distribution of goods once they have been produced and are ready to be shipped to customers.
These platforms provide a convenient and efficient way for suppliers to showcase their products or services and for customers to access a wide range of options. By eliminating the need for intermediaries and connecting suppliers directly with customers, marketplaces enable greater transparency, lower costs, and increased competition. However, one element that is not typically involved in connecting suppliers and customers in fragmented markets is physical distribution centers. Physical distribution centers are primarily responsible for the storage, sorting, and distribution of goods once they have been produced and are ready to be shipped to customers
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Haughton company uses a job costing system for its production costs and a predetermined factory overhead rate based on direct labor costs to apply factory overhead to all jobs. During the month of july, the firm processed three jobs: x13, x14, and x15, of which x13 was started in june.
Answers
According to a 2018 article in Esquire magazine, approximately 70% of males over age will develop cancerous cells in their prostate. Prostate cancer is second only to skin cancer as the most common form of cancer for males in the United States. One of the most common tests for the detection of prostate cancer is the prostate-specific antigen (PSA) test. However, this test is known to have a high false-positive rate (tests that come back positive for cancer when no cancer is present). Suppose there is a 0.02 probability that a male patient has prostate cancer before testing. The probability of a false-positive test is 0.75, and the probability of a false-negative (no indication of cancer when cancer is actually present) is 0.20.
Let C = event male patient has prostate cancer
+ = positive PSA test for prostate cancer
- = negative PSA test for prostate cancer
a. What is the probability that the male patient has prostate cancer if the PSA test comes back positive (to 4 decimals)?
0.0214 [I did this part correctly but I had trouble finding the other parts, they kept marking them incorrectly]
b. What is the probability that the male patient has prostate cancer if the PSA test comes back negative (to 4 decimals)?
c. For older men, the prior probability of having cancer increases. Suppose that the prior probability of the male patient is 0.3 rather than 0.02. What is the probability that the male patient has prostate cancer if the PSA test comes back positive (to 4 decimals)?
d. What is the probability that the male patient has prostate cancer if the PSA test comes back negative (to 4 decimals)?
Answers
Answer:
a) Probability of prostrate cancer given a positive test is P(C|+) = 0.0213
b) Probability of cancer given a negative test is P(C|-) = 0.0161
c) Probability of prostrate cancer given a positive test is P(C|+) = 0.3137
d) Probability of cancer given a negative test is P(C|-) = 0.2553
Explanation:
Probability male patient has prostate cancer, P(C) = 0.02
Probability male patient does not have prostrate cancer P(C') = 1 - 0.02 = 0.98
Probability of a positive test given there is no cancer, i.e. P(false positive) = P(+|C') = 0.75
P(negative test given there is cancer) = P(false negative) = P(-|C) = 0.2
P(negative test given there is no cancer) is the complement of P(+|C') = P(-|C') = 1 - 0.75 = 0.25
Probability of positive test given there is prostrate cancer, P(+|C) is the complement of P(-|C), = 1 - 0.2 = 0.8.
a) Probability of prostrate cancer given a positive test is P(C|+)
According to Baye's theorem, P(C|+) = P(+|C)P(C)/P(+)
For P(+), we use the Law Of Total Probability: P(+) = P(+|C)P(C) + P(+|C')P(C')
P(+) = (0.8 * 0.02) + (0.75 * 0.98) = 0.751
Therefore, P(C|+) = P(+|C)P(C)/P(+)
P(C|+) = (0.8 * 0.02)/0.751 = 0.0213
b) Probability of cancer given a negative test is P(C|-)
According to Baye's theorem, P(C|-) = P(-|C)P(C)/P(-)
P(-) = P(-|C)P(C) + P(-|C')P(C')
P(-) = (0.2 * 0.02) + (0.25 * 0.98) = 0.249
Therefore, P(C|-) = (0.2 * 0.02)/0.249
P(C|-) = 0.0161
Part 2: Given the following;
Probability male patient has prostate cancer, P(C) = 0.3
Probability male patient does not have prostrate cancer P(C') = 1 - 0.3 = 0.70
Probability of a positive test given there is no cancer, i.e. P(false positive) = P(+|C') = = 0.75
P(negative test given there is cancer) = P(false negative) = P(-|C) = 0.2
P(negative test given there is no cancer) is the complement of P(+|C') = P(-|C') = 1 - 0.75 = 0.25
Probability of positive test given there is prostrate cancer, P(+|C) is the complement of P(-|C), = 1 - 0.2 = 0.8.
c) Probability of prostrate cancer given a positive test is P(C|+)
According to Baye's theorem, P(C|+) = P(+|C)P(C)/P(+)
For P(+), we use the Law Of Total Probability: P(+) = P(+|C)P(C) + P(+|C')P(C')
P(+) = (0.8 * 0.3) + (0.75 * 0.7) = 0.751
Therefore, P(C|+) = P(+|C)P(C)/P(+)
P(C|+) = (0.8 * 0.3)/0.765 = 0.3137
d) Probability of cancer given a negative test is P(C|-)
According to Baye's theorem, P(C|-) = P(-|C)P(C)/P(-)
P(-) = P(-|C)P(C) + P(-|C')P(C')
P(-) = (0.2 * 0.3) + (0.25 * 0.7) = 0.235
Therefore, P(C|-) = (0.2 * 0.3)/0.235
P(C|-) = 0.2553
Prostate cancer is a type of cancer that can be detected by the PSA test. The probability of prostate cancer given a positive test is 0.0213 and 0.3137.
What is PSA?Prostate-specific antigen (PSA) test is a diagnostic test that screens for prostate cancer and is a blood test.
Given,
Probability of prostate cancer P(C) = 0.02
Probability of absence of prostate cancer P(C') = 0.98
Probability of false positive P(+|C') = 0.75
Probability of false negative P(-|C) = 0.2
Probability of absence of cancer in negative test = 0.25
Probability of presence of cancer in positive test = 0.8
The probability of the male patient suffering from prostate cancer in case of a PSA reading of 0.0214 is,
By Baye's theorem:
\(\begin{aligned} \rm P(C|+) &= \rm \dfrac{ P(+|C)P(C)}{P(+)}\\\\\rm P(+) &= (0.8 \times 0.02) + (0.75 \times 0.98)\\\\&= \dfrac{(0.8 \times 0.02)}{0.751} \\\\&= 0.0213\end{aligned}\)
The probability of cancer given a negative test P(C|-) is calculated as:
\(\begin{aligned} \rm P(-) &= \rm P(-|C)P(C) + P(-|C')P(C')\\\\\rm P(C|-) &= \dfrac{(0.2 \times 0.02)}{0.249}\\\\&= 0.0161\end{aligned}\)
For the next part, the probability of prostate cancer given a positive test P(C|+) is calculated as:
\(\begin{aligned} \rm P(C|+) &= \rm \dfrac{P(+|C)P(C)}{P(+)}\\\\\rm P(C|+) &= \dfrac{(0.8 \times 0.3)}{0.765} \\\\&= 0.3137\end{aligned}\)
The probability of cancer given a negative test P(C|-) is calculated as:
\(\begin{aligned} \rm P(-) &= \rm P(-|C)P(C) + P(-|C')P(C')\\\\\rm P(C|-) &= \dfrac{(0.2 \times 0.3)}{0.235}\\\\& = 0.2553\end{aligned}\)
Therefore, the probability of prostate cancer with a positive test is 0.0213.
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When a disrupted part of a wetland ecosystem is left alone so that nature can help restore it to what it once was, what are people counting on occurring
Answers
Th people counting on occurring secondary succession to occur.
What is secondary succession?When a place is disturbed but not severely enough to completely clear it of all vegetation and soil, secondary succession happens. Secondary succession can be started by a variety of disturbances, including fire, flooding, windstorms, and human activity (such as logging of forests). A commotion like a fire breaks out. The greenery was devastated by the fire. The soil is not destroyed by the fire, but it leaves nothing behind. First to regrowth are grasses and other herbaceous plants. The open space began to be colonized by little plants and trees.
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The time from when the local anesthetic takes complete effect until the complete reversal of anesthesia is called the __________ of the anesthetic agent.
Answers
The time from when the local anesthetic takes complete effect until the complete reversal of anesthesia is called the duration of the anesthetic agent.
Any approach to cause the lack of sensation in a particular area of the body is known as local anesthesia. Its primary goal is to cause local analgesia, or local insensitivity to pain, however other local senses may also be impacted. It lessens the discomfort and agony associated with surgical and dental procedures for patients. It is safer than general anesthesia in many circumstances, including cesarean sections, and is therefore preferable.
A local anesthetic is a medication that induces loss of nociception and reversible local anesthesia. It can produce effects like analgesia (loss of pain feeling) and paralysis when applied to particular nerve pathways. Aminoamide and aminoester local anesthetics are the two kinds of clinical local anesthetics.
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Pamela cantu operates a school foodservice department in a small, rural community. She feeds approximately 1,000 students per day in three different locations. She receives an average of $1.20 in revenues per meal. Her budget, set at the beginning of the school year by the superintendent, is developed in such a way that a small amount is to be reserved for future equipment purchases and dining-room renovation. These funds are available, however, only if pamela meets her budget. She hopes to use this year's reserve (profit) to buy a $5,000 refrigerated salad bar for the high school. Because it is the midpoint of her school year, help her determine her "performance to budget" thus far (fill in all blanks).
Answers
Please find full question attached
Answer and Explanation:
Please find full answer and explanation attached
Match the financial institution with its definition.
1. Brokerage Firm
2. Credit Union
3. Bank
a. An organization chartered by either the state where it is headquartered or by the federal government.
b. A non-profit company that is owned by its stockholders and provides checking accounts and other financial services.
c. A business where stocks, bonds or mutual funds are sold. They can be found in your hometown or on the internet.
Answers
Answer:
1. C
2. B
3. A
Explanation:
a. Bank: An organization chartered by either the state where it is headquartered or by the federal government.
A bank is said to be federally chartered when it is appropriately authorized and regulated by the federal government of a country with recourse to statutory laws but not the state government. Some examples of federally chartered banks are Wells Fargo Bank, Bank of England, Swiss National Bank, Citizen National Bank, Bank of Japan, PNC Bank, First National Bank, U.S. Bank, Reserve Bank of Australia, etc.
b. Credit Union: A non-profit company that is owned by its stockholders and provides checking accounts and other financial services.
A credit union can be defined as a non-profit making financial cooperative that is typically controlled by its members (employees, church groups, labour unions etc) and it is saddled with the responsibility of providing financial services like the traditional banks.
Generally, the profit made from the amount of money that is being deposited by the members of a credit union are usually returned to the members as a form of better interest rates. Some examples of credit unions are SchoolsFirst Credit Union, New York University Federal Credit Union, Consumers Credit Union, etc.
c. Brokerage Firm: A business where stocks, bonds or mutual funds are sold. They can be found in your hometown or on the internet.
With a command economy, do individuals have choice and flexibility
Answers
PLEASE HELPP!!!! ASAP 50 POINTS WILL MARK BRAINLIEST
What is financing? (Select the best answer.)
Using a debit card to make purchases
Paying back debts
Using credit to pay for purchases
Reducing the principal of a loan
What might you do if you are unable to get a credit card? (Select the best answer.)
Stop accepting government assistance
Pay less attention to your bank balance
Make as many cash purchases as possible
Apply for a department store card
Answers
2.)stop accepting government assistance or apply for a department store card.
Don’t know for sure if these are correct but... Good luck
Luke sold a building and the land on which the building sits to his wholly owned corporation, studemont corporation, at fair market value. the fair market value of the building was determined to be $325,000; luke built the building several years ago at a cost of $200,000. luke had claimed $45,000 of depreciation on the building. the fair market value of the land was determined to be $210,000 at the time of the sale; luke purchased the land many years ago for $130,000. What are the amount and character of Luke's reconized gain or loss on the building?
Answers
To calculate Luke's recognized gain or loss on the building, we must calculate the adjusted basis and compare it to the fair market value at the time of sale.
What is the market price?
To determine a company's market value, multiply the total number of shares outstanding by the current price per share.
Building Adjusted Basis = Building Cost - Accumulated Depreciation
Building Adjusted Basis = $200,000 - $45,000
The building's adjusted basis is $155,000.
Recognized Gain or Loss on the Building = Fair Market Value - Building Adjusted Basis
Building Recognized Gain or Loss = $325,000 - $155,000
Building Recognized Gain = $170,000
The building has a recognized gain of $170,000.
Therefore, the building was held for several years, the gain would be classified as a long-term capital gain.
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What are some examples of companies providing consumers with goods?
Answers
Answer:
is this a multiple choice question?
Explanation:
The process of making decisions about goals and activities that an organization will pursue in the future is referred to as.
Answers
The process whereby a organization makes decisions about what they will do in the future is known as planning.
What is planning?Planning simply means the process of thinking in order to achieve a desirable goal.
Planning is the process of making decisions about goals and activities that an organization will pursue in the future.
Organizations make plans in order to increase sales, revenue, etc.
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a firm acquired an assset on 1st Apri, 1990 at a cost of Le 30,000. The useful life of the asset is expected to be 10 years. The estimated scrap value of the asset at the end of the year is Le 2,000. Show the provision for depreciation account for the first 3 years in the life of the asset using the Straight line method
Answers
Answer:
First year : Le 2100
Second year : Le 2800
Third year : Le 2800
Explanation:
Given the following :
Cost of equipment = 30,000
Useful years = 10
Salvage or scrap value = 2,000
depreciation account for the first 3 years in the life of the asset using the Straight line method :
Straight line Depreciation :
(Cost - salvage value) / useful years
First year: (April - December 1990)
April - December 1990 = 9 months
(30,000 - 2000) / 10 × 9/12
28000 / 10 × 0.75 = Le 2100
Second year:
(30,000 - 2000) / 10 × 12/12
28000/ 10 = Le 2800
Third year:
(30,000 - 2000) / 10 × 12/12
28000/ 10 = Le 2800
Which of the following is NOT a type of account offered by commercial banks to the public?
(A) Trade account
(B) Savings account
(C) Current account
(D) Fixed deposit account
Answers
Trade accounts are NOT a category of accounts that commercial banks provide to the general public.
Which of the following is NOT a type of account offered by commercial banks to the public?Trade accounts are frequently made available by suppliers to their clients, enabling them to order goods and solutions on credit and pay for them later. These accounts have no connection to services offered by commercial banks, such as savings, credit, and time deposits accounts. However, commercial banks also provide the general public with additional sorts of accounts, including bank deposits, bank deposits, and fixed deposit accounts. Savings accounts let users put money in and take it out while collecting interest; credit lines are used for day-to-day transactions; and fixed deposit accounts, which provide higher interest rates but call for locking in the money for a set time period.
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why are medical related professions and human resources important?
Answers
Answer:
because sometimes they help us to get some medicine which can be used to cure a particular disease
which product exists in a monopolistically competitive market?
Answers
Numerous businesses provide competitive products or services that are similar but not exact substitutes. A monopolistic competitive market is present.
Clothing and hair salons are two examples of sectors with monopolistic competition. When businesses provide rival goods or services that are comparable but imperfect substitutes, monopolistic competition exists.
A monopolistic competitive industry has low entry requirements, and decisions made by any one firm do not directly affect those of its rivals. The pricing and marketing choices made by the rival companies serve as their points of differentiation.
Between a monopoly and perfect competition, monopolistic competition exists, combines aspects of both, and includes businesses with comparable but distinct product offerings.
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Answer:
clothing
Explanation:
I learn today that monopolistically competitive is something with varity like cloths there are plenty of options
For this assignment, you will create a budget using the Cost of Living Worksheet. (Do not round any percentages.)
Cost of Living Worksheet
Your job: Sales Representative
Average Salary: $36,000 annually / $3,000 monthly. Note: these are pre-tax amounts, so your take-home pay will be roughly $2,000 monthly.
Based on your salary, what percentage of your monthly take-home pay will go to each of the following expenses? You will use $2,000 as your total take-home pay for the month.
Instructions: Fill in the last column with the correct percentage. The first one, the apartment, has already been done for you. The apartment is $500/$2000 = .25. So, 25% of your monthly total take-home pay goes towards rent. Complete and submit your assignment to 04.01 Your Money Now.
Expense Amount Paid % of total take-home pay of $2,000 per month
Apartment Rent (1 bedroom, 1 bathroom apartment) $500/month 25%
Car Payment (purchased used 4-door sedan) $250/month
Insurance (renter’s insurance, car insurance, health/dental insurance) $200/month
Gas/Parking $200/month
Groceries $360/month
Utilities (electricity, water, gas, garbage, cable) $80/month
Clothing budget $50/month
Entertainment (movies, eating out, etc.) $50/month
Savings Account $150/month
Emergency Fund (car accident, sick leave, house fire, etc.) $115/month
Total expenses $1,955/month
Answers
Answer
1- 25%
2- 12.5%
3- 10%
4- 10%
5- 18%
6- 4%
7- 2.5%
8- 2.5%
9- 7.5%
10- 7.5%
Total expenses =97.75%
Explanation:
You divide everything,So for example 500 divided by 2000=0.25
Then you turn it into a % so 25%
HOPE THIS HELPS
Answer:
Answer
1- 25%
2- 12.5%
3- 10%
4- 10%
5- 18%
6- 4%
7- 2.5%
8- 2.5%
9- 7.5%
10- 7.5%
Total expenses =97.75%
Explanation:
define finance education for class 8
Answers
What's a curling iron?
Answers
Answer:
A curling iron is a tool that is used on hair to create a tight or loose curl.
Business owners are less optimistic about the health of the economy. What will be the effect on aggregate demand
Answers
The effect on aggregate demand is: left Shift in the Aggregate Demand Curve - expectations.
Effect on aggregate demand
Left Shift in the Aggregate Demand Curve - expectations means that the total amount consumer tends to spend on goods and services are decreasing.
Consumer spending less can occur when things are costly or due to the inflation which is the rise in the price of goods and services in the market.
Inconclusion the effect on aggregate demand is: left Shift in the Aggregate Demand Curve - expectations.
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Skysong Supply does not segregate sales and sales taxes at the time of sale. The register total for March 16 is $9.345. All sales are subject to a 5% sales tax. (a1) Compute sales taxes payable. Sales taxes payable use (a2) Make the entry to record sales taxes payable and sales revenue. Omit the cost of goods sold entry. (Credit account titles are outomatically indented when amount is entered. Do not indent manually.)
Answers
The sales taxes payable for March 16 is $0.469.
How much are the sales taxes payable for March 16?Skysong Supply does not segregate sales and sales taxes at the time of sale. Therefore, the sales register total of $9.345 includes both the sales revenue and the sales taxes.
To calculate the sales taxes payable, we need to determine the tax portion of the total sales.
Since all sales are subject to a 5% sales tax rate, we can calculate the tax amount by multiplying the sales register total by 5% (or 0.05). In this case, 5% of $9.345 equals $0.46725, which can be rounded to $0.469.
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Define problem solving skills and Write its importance.
Answers
Answer:
Define: Problem solving skills refers to our ability to solve problems in an effective and timely manner without any impediments
Importance: It involves being able to identify and define the problem, generating an alternative solution, evaluating and selecting the alternative, and implementing the selected solution
Problem-solving allows us to identify and capitalize on opportunities in the environment, as well as exert some control over the future. Problem-solving abilities and the problem-solving process are essential components of daily life for both individuals and organizations.
What is the concept of problem-solving?The act of defining a problem, determining the cause of the problem, identifying, prioritizing, and selecting alternatives for a solution, and implementing a solution is known as problem-solving.
The ability to identify problems, brainstorm and analyze solutions, and implement the best solutions is referred to as problem-solving skills. Problem-solving, which is a common part of most activities, is the process of achieving a desired outcome by overcoming obstacles. Problems that require resolution range from simple personal tasks to complicated problems in business and technology.
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Which of the following is a style trend?
A. An increase in the population of young parents in a neighborhood
B. The popularity of a new type of jeans
C. An increased concern for protecting the environment
D. The popularity of cell phones that can access the Internet
Answers
B
Explanation:
You have agreed to hire a new employee from England. Part of the hiring agreement is to pay for moving costs. If the agreement was 10% of their salary to cover costs of moving and they were hired at $65,000/year. If moving costs totaled $6,000, did the employee receive enough money to cover their moving costs
Answers
Answer:
Yes, the employee receives enough money to cover their moving costs.
Explanation:
The following are given in the question:
Annual salary = $65,000
Percentage of salary agreed to pay as moving costs = 10%
Total moving costs paid by the new employee = $6,000
From the above, we have:
Moving costs agreed by the employer to pay the new employee = Annual salary * Percentage of salary agreed to pay as moving costs = $65,000 * 10% = $6,500
Since the $6,500 moving costs agreed by the employer to pay the new employee is greater than the $6,000 total moving costs paid by the new employee, the employee therefore receives enough money to cover their moving costs.
a sales agent has just attended a seminar on the benefits of using social media in marketing her client’s properties. she is very excited to begin to use all the wonderful ideas that were presented. in order to advertise her client’s properties on social media she will need
Answers
In order to advertise her client's properties on social media, the sales agent will need access to social media platforms, such as Fac-ebo-ok, Tw-itt-er, Inst-agr-am, or Lin-ke-dIn.
She will also need to create compelling and visually appealing content, including photos and videos of the properties. Additionally, she may need to familiarize herself with social media advertising tools and techniques to effectively target potential buyers and reach a wider audience. It is also important for her to have a clear strategy and goals in mind to ensure that her social media marketing efforts align with her client's objectives.
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Suppose that the distribution of the 1-year loss is as follows.
Loss ($ million) Probability
−1 0.4
0 0.2
1 0.2
2 0.1
4 0.1
(a) Find the 1-year 70% VaR.
(b) Find the 1-year 70% ES.
(c) Find the 1-year 80% VaR.
(d) Find the 1-year 80% ES.
Answers
Suppose that the distribution of the 1-year loss is given as:L($ million) Probability 0.1a) 1-year 70% is defined as the maximum possible loss for a given level of confidence and period of time.
The 70% VaR, therefore, implies that the confidence level is 1-70% = 30%, and the period of time is 1 year.To calculate the 70% VaR, we need to find the maximum loss of the 30% probability:1. Sort the loss and probability values in descending order:Loss ($ million) Probability
Cumulate the probability values:Loss ($ million) Probability Cumulative Probability 1.03. Identify the maximum cumulative probability that is less than or equal to 0.3. From the table above, the maximum cumulative probability is 0.2.4.
The corresponding loss is the 70% VaR: 2 $ million.b) 1-year 70% ES:ES is defined as the average loss of the worst 30% of scenarios.
In order to find the ES, we must first calculate the loss corresponding to the 30th percentile. From the cumulative probability column of the table above, the loss corresponding to the 30th percentile is $0 million.To calculate the ES, we need to average the losses exceeding $0 million.
These are losses for which the probability is 0.4, 0.1, and 0.1.Loss Probability Cumulative Probability -1 0.4 0.4 0 0.1 0.5 1 0.1 0.6 2 0.1 0.7 4 0.1 0.8 The average of these losses is: (-1*0.4+0*0.1+1*0.1+2*0.1+4*0.1)/0.3 = 1.13 $ millionThus, the 1-year 70% ES is 1.13 $ million.c) 1-year 80% VaR:To calculate the 80% VaR, we need to find the maximum loss of the 20% probability.
Using the same steps from part (a), the 80% VaR is the maximum cumulative probability that is less than or equal to 0.2.Loss Probability Cumulative Probability -1 0.4 0.4 0 0.2 0.6 1 0.2 0.8 2 0.1 0.9 4 0.1 1.0The maximum cumulative probability that is less than or equal to 0.2 is 0.6.
Therefore, the corresponding loss is 0 $ million.d) 1-year 80% ES:To calculate the 80% ES, we need to find the average loss of the worst 20% of scenarios. The loss corresponding to the 20th percentile is $0 million. The losses exceeding $0 million correspond to probabilities of 0.2, 0.2, 0.1, and 0.1.Loss Probability Cumulative Probability -1 0.4 0.4 0 0.2 0.6 1 0.2 0.8 2 0.1 0.9 4 0.1 1.0 The average of these losses is: (-1*0.4+1*0.2+2*0.1+4*0.1)/0.2 = 0.6 $ millionThus, the 1-year 80% ES is 0.6 $ million.
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Why would it be a good idea to mix stocks and bonds in your investment portfolio?
Answers
Answer:
To have more variety and just more in general!
Explanation:
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