Portfolio manager of the delaware fund

Assignment Help Financial Management
Reference no: EM13731406

Assume that you are the portfolio manager of the Delaware Fund, a $4 million mutual fund that contains the following stocks: Stock Amount Beta A $ 400,000 1.50 B $ 600,000 0.50 C $1,000,000 1.25 D $2,000,000 0.75. The required rate of return in the market is 14.00% and the risk-free rate is 6.00%. What rate of return should investors expect (and require) on their investment in this fund?

Reference no: EM13731406

Questions Cloud

What is your estimate of the stocks current value : Sawchuck Consulting has been profitable for the last 5 years, but it has never paid a dividend. Management has indicated that it plans to pay a $0.25 dividend 3 years from today, then to increase it at a relatively rapid rate for 2 years, and then to..
What is the current yield : The 8% bonds of a company are currently selling at $1027. These bonds have 16years left until maturity. What is the current yield?
What are expected return and risk of the portfolio delta : The portfolio Alpha has an expected return of 18.50% and risk of 60%. The portfolio Gamma has an expected return of 11.75% and risk of 30%. The risk of market portfolio is 40%. Assume that the Capital Asset Pricing Model holds, what are the expected ..
What is the expected return on the market : The stock of Alpha Company has an expected return of 16.25% and a beta of 1.35, and Gamma Company stock has an expected return of 10.50% and a beta of X. The beta of a portfolio P is 1.05. The portfolio P consists of 40% of the investment in Alpha an..
Portfolio manager of the delaware fund : Assume that you are the portfolio manager of the Delaware Fund, a $4 million mutual fund that contains the following stocks: Stock Amount Beta A $ 400,000 1.50 B $ 600,000 0.50 C $1,000,000 1.25 D $2,000,000 0.75. The required rate of return in the m..
What is difference in sharpe ratio of an optimal portfolio : Stock A has an expected rate of return of 12% and a standard deviation of returns of 40%. Stock B has an expected rate of return of 18% and variance of returns of 0.36. The correlation coefficient between the returns of Stock A and Stock B is 0.25.
The price of corporation stock is expected : The price of Corporation stock is expected to be $68 in 5 years. Dividends are anticipated to increase at an annual rate of 20 percent from the most recent dividend of $2.00. If your required rate of return is 16 percent, how much are you willing to ..
What is the companys target debt and equity ratio : Fama’s Llamas has a weighted average cost of capital of 10.3 percent. The company’s cost of equity is 12 percent, and its pre-tax cost of debt is 8.3 percent. The tax rate is 38 percent. What is the company’s target debt and equity ratio?
Measured by standard deviation of returns : The expected rate of return for stock A, stock B, and stock C are X%, 20%, and 14%, respectively. The risk (as measured by standard deviation of returns) of stock A, stock B, and stock C are 43%, 62%, and 52%, respectively.

Reviews

Write a Review

Financial Management Questions & Answers

  Cost allocation on a piece of land if the original cost

How do I figure out cost allocation on a piece of land if the original cost was 250,000, market value is 300,000, net book value is 250,000, and offer to purchase is 300,000?

  How much will you have if you make deposits

You deposit $1,900 at the end of each year into an account paying 10.1 percent interest. How much money will you have in the account in 24 years? How much will you have if you make deposits for 48 years?

  Differing line of business use different costs of capital

Jenkins Security has learned that a rival has offered to supply a parking garage with security of ten years for $40,000 up front and a further $20,000 per year.  Different division with differing line of business use different costs of capital becaus..

  Bright star dance company will be producing a modern dance

bright star dance company will be producing a modern dance show over a three-month period of time in october-december.

  Managerial theories are based on historical approaches

Many of the approaches to management and/or managerial theories are based on historical approaches to management and/or historical managerial theories.

  The florida retail company is a collection of small

the florida retail company is a collection of small consumer electronic retail stores. the company is known for its

  A project has an initial cost of 40000 expected net cash

a project has an initial cost of 40000 expected net cash inflows of 9000 per year for 7 years and a cost of capital of

  How much its current market value would be

A bank offers a three-month, $100,000 negotiable CD, which will pay a 4.4% annual interest rate. Assume that the market rate on the CD rose to 5% immediately after you purchased the CD, how much its current market value would be.

  What is the smallest expected gain

A stock has an annual return of 11 percent and a standard deviation of 54 percent. What is the smallest expected gain over the next year with a probability of 1 percent?

  What is the minimum expected annual return for stock

In order to fund her retirement, Michele requires a portfolio with an expected return of 0.11 per year over the next 30 years. She has decided to invest in Stocks 1, 2, and 3, with 25 percent in Stock 1, 50 percent in Stock 2, and 25 percent in Stock..

  1 financial ratio analysis is used by managers equity

1. financial ratio analysis is used by managers equity investors long-term creditors and short-term creditors. what is

  What must the coupon rate be on mertons bonds

Merton Enterprises has bonds on the market making annual payments, with 12 years to maturity, and selling for $963. At this price, the bonds yield 7.5 percent. What must the coupon rate be on Merton’s bonds?

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