An investor was expecting a return

Assignment Help Financial Management
Reference no: EM13922975

An investor was expecting a return of 14.7% on her portfolio with a beta of 1.13 before the market risk premium decreased from 8 to 7%. Based on this change, what return should she now expect on the portfolio?

A. 13.57% B. 13.89% C. 14.67% D. 15.87%

Reference no: EM13922975

Questions Cloud

Capital budgeting analysis due to the effects of inflation : Which one of the following categories would be least likely to require annual adjustments in a capital budgeting analysis due to the effects of inflation?
Got too much invested in that project to pull out now : The statement "We've got too much invested in that project to pull out now" possibly illustrates the need to:
Costs to financial distress-no operating effects to leverage : Calculate the value of leverage for Cruise Company and Kidman Company, whose economic balance sheets are shown. Assume the marginal corporate tax rate is 35%, the marginal tax rate on personal income derived from equity is 20%, and the marginal tax r..
Value a constant growth stock financial analysts forecast : Value a Constant Growth Stock Financial analysts forecast Wal-Mart Stores (WMT) growth for the future to be 14.00 percent. Their recent dividend was $2.43. What is the value of their stock when the required rate of return is 16.00 percent?
An investor was expecting a return : An investor was expecting a return of 14.7% on her portfolio with a beta of 1.13 before the market risk premium decreased from 8 to 7%. Based on this change, what return should she now expect on the portfolio?
Portfolio return at the beginning of the month : Portfolio Return At the beginning of the month, you owned $6,100 of Company G, $8,300 of Company S, and $1,600 of Company N. The monthly returns for Company G, Company S, and Company N were 7.55 percent, -1.53 percent, and -.20 percent. What is your ..
Considering project-will result in initial aftertax cach : Scanlin, Inc., is considering a project that will result in initial aftertax cash savings of $1.86 million at the end of the first year, and these savings will grow at a rate of 2 percent per year indefinitely. What is the maximum initial cost the co..
What is the return shareholders are expecting : Expected Return Circuit City Stores (CC) recently paid a $.33 dividend. The dividend is expected to grow at a 24.70 percent rate. At the current stock price of $9.66, what is the return shareholders are expecting?
What was the stocks return for the missing year : You find a certain stock that had returns of 12.2 percent, –21.1 percent, 27.1 percent, and 18.1 percent for four of the last five years. Assume the average return of the stock over this period was 10.20 percent. What was the stock’s return for the m..

Reviews

Write a Review

Financial Management Questions & Answers

  Major components of a financial planning model

Which of the following is not typically included among the three major components of a financial planning model?

  What is the current yield on bonds-effective annual yield

Bourdon Software has 8.6 percent coupon bonds on the market with 20 years to maturity. The bonds make semiannual payments and currently sell for 107.1 percent of par. What is the current yield on the bonds?

  Disadvantages of these primary rebalancing strategies

What are the advantages and disadvantages of these primary rebalancing strategies

  What is the smallest expected gain over the next year

A stock has an annual return of 10.4 percent and a standard deviation of 41 percent. What is the smallest expected gain over the next year with a probability of 1 percent?

  What approximate discount rate

At what approximate discount rate would $10,000 received in 5 years be worth $5,000 today? How many years would you need to receive $1,000 to be worth $10,000 today assuming a 5% discount rate? If you place $10 into a savings account and you know it ..

  What is affordable home purchase price using assumptions

Assume the following: Annual Salary = $65,000 Other monthly debt payments = $250 Estimated monthly property taxes & insurance = $500 Mortgage interest rate = 6.0% Mortgage term = 30 years Down payment = 10% what is the affordable home purchase price ..

  Gathering the information and analyzing the information

The first thing you need to do is probably ask me questions: 1. What questions (and why) might you have before you start your assignment? 2. What would your recommendation be based on?

  How purchase of the apple press might affect

How purchase of the apple press might affect the company revenue goals - return on investment for new capital investments and the company uses a cost of capital of 8.

  Discuss recent economic conditions in the industry

First, you need to pick a public company to analyze. You should have already informed me of the company you have picked. Discuss recent economic conditions in the industry, as well as prospects for the future

  What is present value of prize interest compounded annually

A major lottery advertises that it pays the winner $10 million. However this prize money is paid at the rate of $500,000 each year (with the first payment being immediate) for a total of 20 payments. What is the present value of this prize at 10% int..

  Use of cash

Which one of the following is a use of cash?

  Residual distribution model and pays all distributions

Petersen Company has a capital budget of $1.1 million. The company wants to maintain a target capital structure which is 35% debt and 65% equity. The company forecasts that its net income this year will be $800,000. If the company follows a residual ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd