Rank these stocks from the most risky to the least risky

Assignment Help Finance Basics
Reference no: EM131107306

You are considering three stocks-A, B, and C-for possible inclusion in your investment portfolio. Stock A has a beta of 0.80, stock B has a beta of 1.40, and stock C has a beta of 0.30.

a. Rank these stocks from the most risky to the least risky.

b. If the return on the market portfolio increased by 12%, what change would you expect in the return for each of the stocks?

c. If the return on the market portfolio decreased by 5%, what change would you expect in the return for each of the stocks?

d. If you felt that the stock market was getting ready to experience a significant decline, which stock would you probably add to your portfolio? Why?

e. If you anticipated a major stock market rally, which stock would you add to your portfolio? Why?

Reference no: EM131107306

Questions Cloud

Draw the karnaugh map and truth table for the function : Design a circuit with a 4-bit input representing the binary number A1A2A3A4. The output should be 1 if the input value is divisible by 3. Assume that the circuit is to be used only for the digits 0 through 9, thus values for 10 to 15 can be don't car..
Which approach provides the better accounting : Norman Co., a fast-growing golf equipment company, uses U.S. GAAP. It is considering the issuance of convertible bonds. The bonds mature in 10 years, have a face value of $400,000, and pay interest annually at a rate of 4%.
Compare the risks of these portfolios to the market : Calculate the betas for portfolios A and B. Compare the risks of these portfolios to the market as well as to each other. Which portfolio is morerisky?
Differences between u.s. gaap and igaap : Briefly describe some of the similarities and differences between U.S. GAAP and iGAAP with respect to the accounting for dilutive securities, stock-based compensation, and earnings per share.
Rank these stocks from the most risky to the least risky : You are considering three stocks-A, B, and C-for possible inclusion in your investment portfolio. Stock A has a beta of 0.80, stock B has a beta of 1.40, and stock C has a beta of 0.30. Rank these stocks from the most risky to the least risky.
Where can authoritative igaap : Where can authoritative iGAAP are found related to dilutive securities, stock-based compensation, and earnings per share?
Identify each of the seven steps needed to perform the call : Now look at the code generated for a parameter less call by a C or C++ compiler on the machine you selected. Can you identify each of the seven steps needed to perform the call?
Bio stats practise : Should you have a cup of coffee to make you more alert when studying for a big test? A researcher is interested in studying the effect of caffeine, and he comes up with the following plan for an experiment. The experiment will involve 100 volunteers ..
What type of earnings per share presentation : What type of earnings per share presentation is required in a complex capital structure?

Reviews

Write a Review

 

Finance Basics Questions & Answers

  Lindsay brown owns a risky portfolio with a 15 expected

lindsay brown owns a risky portfolio with a 15 expected return. the riskfree return is 5. what is the expected return

  1 explain what was the markets reaction to the

1. explain what was the markets reaction to the self-reported earnings announcement?2. briefly examine the reported

  Determine the accounts receivable turnover

A corporation's 2000 sales were $8,954,238. Sales were $5 million ten years earlier. To the nearest percentage point, at what rate have sales been growing?

  What is the price of the stock today

If the required return is 12 percent, what is the price of the stock today?

  Golf course installing a new automaticsprinkler system

Scenario:Golf Course installing a new AutomaticSprinkler SystemThe eighteen-hole Redwood Golf Course is in need of a new sprinkler system, which is estimatedto cost $1 million. The Golf Course Superintendent, who is in charge of maintaining the golfc..

  New division of the existing business in balanced scorecard

Develop at least three strategic objectives for each of the four balanced scorecard areas identified (Financial, Customer, Process, Learning and Growth). Your objectives should be selected, in part, based on an evaluation of a number of potential ..

  Expected return for the market based on the capm

Decker Corp. Common Stock has a required return of 17.5% and a beta of 1.75. If the expected risk free return is 3%, what is the expected return for the market based on the CAPM?

  Idiosyncratic and systematic risk and risk premium

Define and contrast idiosyncratic and systematic risk and the risk premium required for taking each on. Can beta be helpful in this instance? Explain your answer.

  What is the company expected growth rate

What is the company's expected growth rate? Round your answer to two decimal places at the end of the calculations.

  The oasdi program pays survivor benefits

The OASDI program pays survivor benefits to eligible family members based on the deceased worker's earnings record. Explain whether each of the following persons would be eligible for OASDI survivor benefits based on the deceased worker's earnings..

  Prepared to pay today for the contract

The payee is offering to sell the contract to a finance company in order to raise urgently needed cash. If the finance company requires a 16% rate of return, what price will it be prepared to pay today for the contract?

  What is the net advantage to leasing

Annual maintenance costs associated with ownership are estimated at $240,000, but this cost would be borne by the lessor if it leases. What is the net advantage to leasing (NAL), in thousands?

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