Portfolio is invested in a risk-free security and two stocks

Assignment Help Financial Management
Reference no: EM13971073

A $16,000 portfolio is invested in a risk-free security and two stocks. The beta of stock A is 0.67 while the beta of stock B is 1.64. One-half of the portfolio is invested in the risk-free security. How much is invested in stock A if the beta of the portfolio is 0.52?

Reference no: EM13971073

Questions Cloud

What are the major weaknesses of this financial plan : As a financial consultant you are helping a client who just won a fortune in Las Vegas, plan his retirement. He plans to deposit his newly won fortune in his bank today (January 1, 2016) in a savings account that pays 5% interest compounded annually...
Contribute for the growing importance of distribution : Discuss with illustration A) the factors that contribute for the growing importance of distribution channels management; B) how the presence of intermediaries overcomes discrepancies and improves contact efficiency;
Harry picture manufactures various picture frames : What is the total cost of building 8 picture frames by a new employee using the cumulative average-time method? You may use an index of -0.1520. A) $876 B) $1,036C) $129.50 D) $400
Why is the burden of proof on the plaintiff : Now answer the following questions: Why is the burden of proof on the plaintiff? How easy do you think it is for an individual to win a discrimination case against a corporation? What does the individual bringing the case stand to lose
Portfolio is invested in a risk-free security and two stocks : A $16,000 portfolio is invested in a risk-free security and two stocks. The beta of stock A is 0.67 while the beta of stock B is 1.64. One-half of the portfolio is invested in the risk-free security. How much is invested in stock A if the beta of the..
Differences between libel and slander : Compare and contrast the fundamental differences between libel and slander, and provide one (1) example of each term in question which demonstrates the key differences between them.
What is the expected return on silvanus stock : The stock of Silvanus Wildlife, Inc., has a beta of 1.04. The market risk premium is 8.21 percent and the risk-free rate is 3.59 percent. What is the expected return (in percents) on Silvanus stock?
Equity loans typically have payments than automobile loans : Interest rates on automobile loans tend to be higher than rates on home equity loans. Home equity loans typically have more payments than automobile loans.
Treasury bill rate and market risk premium is estimated : The common stock of Buildwell Conservation & Construction, Inc., has a beta of .80. The Treasury bill rate is 6%, and the market risk premium is estimated at 9%. BCCI’s capital structure is 25% debt, paying a 5% interest rate, and 75% equity. Buildwe..

Reviews

Write a Review

Financial Management Questions & Answers

  What was its return on total assets

Barnes Corp's total assets at the end of last year were $415,000,000 and its net income after taxes was $17,750,000. What was its return on total assets?

  Firm currently has equity with a market value

A firm currently has equity with a market value of $600,000,000 and debt with a market value of $500,000,000. The firm has 10,000,000 shares outstanding. The bonds offer investors a return of 8%. The firm is contemplating issuing $300,000,000 in new ..

  What is the beta of your portfolio

What is the beta of your portfolio? If you expect the market to earn 14 percent and the risk-free rate is 4 percent, what is the required return of the portfolio?

  Dollar amount of your profit or loss from buying call option

The U.S. three-month interest rate (annualized) is 2%. The British pound three-month interest rate (annualized) is 3.5%. Assume interest rate parity exists. The expected inflation over this period is 6% in the U.S. and 2% in England. Determine the do..

  The firms cost of capital for the preferred stock

(Cost of preferred stock) Your firm is planning to issue preferred stock. The stock is expected to sell for $98.64 a share and will have a $100 par value on which the firm will pay a 13.6 percent dividend. What is the cost of capital to the firm for ..

  Vast resources available to mutual fund managers

Given the vast resources available to mutual fund managers, these managers on average have generally:

  What is the dividend yield on watsons common stock

What is the dividend yield on Watson's common stock?

  Present value if the payments are an annuity due

Suppose you are going to receive $13,500 per year for five years. The appropriate inerest rate is 8.4 percent. What is the present value of the payments if they are in the form of an ordinary annuity and what is the present value if the payments are ..

  What is present value-assume the appropriate discount rate

An investment will pay you $91,000 in five years. Assume the appropriate discount rate is 6.25 percent compounded daily. What is the present value?

  Four-year project to improve production efficiency

Warmack Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $440,000 is estimated to result in $175,000 in annual pretax cost savings.  Calculate the NPV of this project.

  How much will the expansion cost in annual interest

Barbarita’s Linens want to expand into the store next door to set up a Baby Supply Store. She needs $150,000 for the build out and new inventory of the project. Calculate the WACC. How much will the expansion cost in annual interest?

  Determine the international fisher effect

With a minimal amount of research, you determine the following information regarding the U.S. dollar and the British Pound: United States Great Britain. With the above information, determine the following: Future $ spot rate in 6 months of the dollar..

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