Required:a. Calculate the standard deviation of returns of each service provider.b. Which service provider would you recommend for Mr. Lutombi to invest in?c. Assuming Mr. Lutombi invests 40% of his money in MTC and the rest in Telecom, what is Mr. Lutombi portfolio return? Question 3Mr. Lutombi, aged 55 years old, is the current Roads Authority (RA) CEO. He iscontemplating an early retirement and plans to invest his terminal benefits in MobileTelecommunication Company (MTC) Namibia (MTC) and separate TELECOM Namibia(TELECOM) STOCK. Telecom is 100% government owned and was established in 1992as a commercial subsidiary company of Namibia Post and Telecom Holdings Limited.TELECOM is serving more than 396 000 (fixed and mobile) customers, with 986employees and annual revenue of more than N$ 1.5 Billion. MTC was established in 1994and is mainly into mobile cellular business with over two million active subscribers andhas a staff compliment of 421.The following information relates to the two companies:State of the economyMTCProbability of stateof economyLikely returns givenstate of economyBoom5010%Depression2012%Recession?2%Assuming: The market return is 12%, standard deviation of expected market return is6%.TelecomLikely returns given stateof economy22%(2%)15%

In finance we use standard deviation as a measure of risk. Now standard deviation of returns is a…

Required: a. Calculate the standard deviation of returns of each service provider. b. Which service provider would you recommend for Mr. Lutombi to invest in? c. Assuming Mr. Lutombi invests 40% of his money in MTC and the rest in Telecom, what is Mr. Lutombi portfolio return?

Required: a. Calculate the standard deviation of returns of each service provider. b. Which service provider would you recommend for Mr. Lutombi to invest in? c. Assuming Mr. Lutombi invests 40% of his money in MTC and the rest in Telecom, what is Mr. Lutombi portfolio return?

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter14: Choice Of Business Entity—operations And Distributions

Section: Chapter Questions

Problem 71TA

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Raj Ltd.is a new company that was established on 1st January, 2020 to oversee the production of coronavirus vaccines for Ghana. On 1st July, 2020, Raj Ltd.acquired 75% shares in Harriet Ltd., a pharmaceutical company, to speed up the vaccine production. As anew graduate from UGBS, Raj Ltd.has employed you as their accountant. At a management meeting held, a number of issues were raised about how Raj Ltd.should deal with its transactions and investment in Harriet Ltd. and the need to conduct financial ratio analysis to determine the profitability and sustainability of Harriet Ltd. In a memo to management, provide your views on how the following issues should be addressed.Raj Ltd.is planning to sell 30% of their shares to another company who wants to supportlocal production of the vaccine. How will this transaction affects the preparation of Raj Ltd.financial statements for the next accounting period?
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CONVEX Ltd. is a new company that was established on 1st January, 2020 to oversee the production of coronavirus vaccines for Ghana. On 1st July, 2020, CONVEX Ltd. acquired 75% shares in CONCAVE Ltd., a pharmaceutical company, to speed up the vaccine production. As a new graduate from UGBS, CONVEX Ltd. has employed you as their accountant. At a management meeting held, a number of issues were raised about how CONVEX Ltd. should deal with its transactions and investment in CONCAVE Ltd. and the need to conduct financial ratio analysis to determine the profitability and sustainability of CONCAVE Ltd. In a memo to management, provide your views on how the following issues should be addressed. Issue CCONVEX Ltd. is planning to sell 30% of their shares to another company who wants to support local production of the vaccine. How will this transaction affects the preparation of CONVEX Ltd. financial statements for the next accounting period?
CONVEX Ltd. is a new company that was established on 1st January, 2020 to oversee the production of coronavirus vaccines for Ghana. On 1st July, 2020, CONVEX Ltd. acquired 75% shares in CONCAVE Ltd., a pharmaceutical company, to speed up the vaccine production. As a new graduate from UGBS, CONVEX Ltd. has employed you as their accountant. At a management meeting held, a number of issues were raised about how CONVEX Ltd. should deal with its transactions and investment in CONCAVE Ltd. and the need to conduct financial ratio analysis to determine the profitability and sustainability of CONCAVE Ltd. In a memo to management, provide your views on how the following issues should be addressed. Issue Assuming there is the need for CONVEX Ltd. to prepare consolidated financial statements and CONCAVE Ltd. has presented its separate financial statement to CONVEX Ltd., comment on how the following transactions between CONVEX Ltd. and CONCAVE Ltd. will be accounted for in the consolidated…
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CONVEX Ltd. is a new company that was established on 1st January, 2020 to oversee the production of coronavirus vaccines for Ghana. On 1st July, 2020, CONVEX Ltd. acquired 75% shares in CONCAVE Ltd., a pharmaceutical company, to speed up the vaccine production. As a new graduate from UGBS, CONVEX Ltd. has employed you as their accountant. At a management meeting held, a number of issues were raised about how CONVEX Ltd. should deal with its transactions and investment in CONCAVE Ltd. and the need to conduct financial ratio analysis to determine the profitability and sustainability of CONCAVE Ltd. In a memo to management, provide your views on how the following issues should be addressed. Issue Assuming there is the need for CONVEX Ltd. to prepare consolidated financial statements and CONCAVE Ltd. has presented its separate financial statement to CONVEX Ltd., comment on how the following transactions between CONVEX Ltd. and CONCAVE Ltd. will be accounted for in the consolidated…