+1-415-670-9189
info@expertsmind.com
What is the discount rate
Course:- Financial Management
Reference No.:- EM13942921




Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Financial Management

Henry, a direct descendant of Jefferson Morgan has inherited $450,000. A financial advisor tells her to invest this amount and target an average of at least 8% return over a 30 years. Henry decides to invest in a Northern Endowment Fund that has had a ten year average return of 8.5%. During the same time, S&P500 has had a 13% return (this is market return). The risk free return is 2% and the beta of the fund is 0.8.

a) What is the discount rate?

 

b) Would a beta of 1.1 increase her returns?




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Financial Management) Materials
A futures price is currently $60. it is known that over each of the next two three-month periods it will either rise by 10% or fall by 10%. The risk-free interest rate is 8% p
Weisbro and Sons purchase their inventory one quarter prior to the quarter of sale. The purchase price is 60 percent of the sales price. The accounts payable period is 60 days
The alternative to investing in the new production line is to overhaul the existing line, which currently has both a book value and a salvage value of $0. It would cost $ 150,
You are concerned about the market outlook and want to hedge your exposure in the stock market. Two strategies are available. One is to write call options on your portfolio. T
You are trying to pick the least-expensive car for your new delivery service. You have two choices: the Scion xA, which will cost $22,000 to purchase and which will have OCF o
Discuss the fringe benefit level change as a key component of the operating budget for any healthcare organization. Why is it so important? Your response must be at least 200
Calvin is an 85 year old single taxpayer who is in the 39.6% federal income tax bracket. As part of his estate planning strategy, he gifted General Electric Corporation bonds
Explain the meaning of simple interest? Briefly describe what is meant by the time value of money? Describe the process of compounding and the meaning of compound interest? Wh