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1. An individual has $45,000 invested in a stock with a beta of 0.4 and another $60,000 invested in a stock with a beta of 1.5. If these are the only two investments in her portfolio, what is her portfolio's beta? Round your answer to two decimal places.
2. Suppose you manage a $3.98 million fund that consists of four stocks with the following investments: Stock Investment Beta A $260,000 1.50 B 650,000 -0.50 C 1,220,000 1.25 D 1,850,000 0.75 If the market's required rate of return is 12% and the risk-free rate is 4%, what is the fund's required rate of return? Round your answer to two decimal places. %
3. Assume that the risk-free rate is 6.5% and that the market risk premium is 6%. What is the required rate of return on a stock with a beta of 0.8? Round your answer to two decimal places. % What is the required rate of return on a stock with a beta of 2.2? Round your answer to two decimal places. %
Some people take a position that the Return on Investment (RoI) is the appropriate measure or decision rule to use. Do you agree? Why or why not? How would the project's RoI be calculated?
if the stock currently sells for 60 what is your best estimate of the companys cost of equity capital using the
watkins inc. has never paid a dividend and when it might begin paying dividends is unknown. its current free cash flow
Return to the box "International Investing Raises Questions" on page 918. The article was writ¬ten several years ago. Do you agree with its response to the question, "Can U.S. companies with global operations give you international diversification..
Suppose you purchased a share of stock for $50 one year ago, sold it today for $60, and during the year received three dividend payments $2.70,
Suppose the current stock price is $50. At the end of 6 months it will be either $56 or $45. The risk-free interest rate is 2% per annum. What is the risk-neutral probability that the stock price will increase in 6 months? Report in percentage ..
consider the following two stocks stock a has an expected return of 10 and a standard deviation of 8 per year. stock b
should hospitals and physicians ldquoundercoderdquo medicare patient stays and patient visits in order to reduce the
Right away, market interest rates jumped, and the YTM on your bond rose to 6 percent. What happened to the price of your bond?
Discuss whether you believe analysts forecasts are more relevant for business decision making than financial statement information.
1. what is the risk on different financial assets and what is affecting their risk?2. how many different bonds and
Assume that no costs other than the call premium would be incurred to call and refund the bonds, and also assume that the yield curve is horizontal, with rates expected to remain at current levels on into the future. Under these conditions, what ..
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