Assume that HappyDays, Inc., pays an 8 percent return during expansions and a zero percent return during
Question:
Assume that HappyDays, Inc., pays an 8 percent return during expansions and a zero percent return during recessions with certainty. SadDays, Inc., pays a zero percent return in expansions and an 8 percent return in recessions with certainty. Show how the fluctuation in return is eliminated if an investor splits his or her surplus funds equally between HappyDays and SadDays.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Financial System Of The Economy Principles Of Money And Banking
ISBN: 9780765622464
5th Edition
Authors: Maureen Burton,Bruce Brown
Question Posted: