What is the expected return for this portfolio

Assignment Help Financial Management
Reference no: EM131351304

An investor has the following portfolio:

Stock Beta   Investment

Tootsie Roll Industries 1.3 $10,000

The Hershey Company   1.4   $30,000

Nestle 0.6   $10,000

If the T-Bill rate is 5% and the market risk premium is 5.5%, according to the CAPM, what is the expected return for this portfolio?

The expected return for this portfolio is ___?%.

?(Round to two decimal places.)

Reference no: EM131351304

Questions Cloud

The reasons for making such investments : Assume that you have a client who wants to make an investment of $ 400,000. Explain what investment recommendations you would make (stocks , bonds, t-bills, mutual funds, etc.) and the reasons for making such investments. You can choose the investor ..
What is total dollar return on this investment : Six months ago, you purchased 1,200 shares of ABC stock for $21.20 a share and have received total dividend payments of $.60 a share. Today, you sold all of your shares for $22.20 a share. What is your total dollar return on this investment?
Characteristics is associated with financing type project : Which one of the following characteristics is most associated with financing type projects?
What is my new balance after interest is added : Suppose that during a 31-day billing cycle, my credit card balance was $429.49 for the first 15 days of the month, it was $558.87 for the next 11 days of the month, and it was $695.85 for the last 5 days of the month. If my credit card's APR is 15.02..
What is the expected return for this portfolio : If the T-Bill rate is 5% and the market risk premium is 5.5 %, according to the CAPM, what is the expected return for this portfolio? The expected return for this portfolio is ___%.
Find the rectangular equation of the curve : Find the rectangular equation of the curve whose parametric equations are given. Then graph the equation using arrows to indicate orientation.
Define the elements of a legal contract using examples : Define the elements of a legal contract using examples from the scenario where applicable. Decide whether or not there was a contract for the purchase of the automobile.
What is a multiple baseline design : What is a multiple baseline design? Why is it used? Distinguish between multiple baseline designs across subjects, across behaviors, and across situations.
What is the perimeter of the triangle : Triangle QRS has sides of lengths 14, 19, and t, where t is the length of the longest side. If t is the cube of an integer, what is the perimeter of the triangle?

Reviews

Write a Review

Financial Management Questions & Answers

  Dividends continue to grow at rate for foreseeable future

ATP Industries paid a $0.50 dividend to its common shareholders 6 years ago. It just paid a dividend of $0.67 to its common shareholders. If dividends continue to grow at this rate for the foreseeable future, and the shares are worth $10.05, what is ..

  What will be the interest expense for the first year

You want to borrow $150,000 to start a new business. A bank will lend the money at 12.68% annual interest with annual payments for 15 years. What will be the interest expense for the first year?

  What is the effective annual cost of forgoing the discount

Use two decimal places in your answers. All problems are worth one point each except 6a is worth two points. A firm plans to issue $5,000,000 of commercial paper for 30 days. A dealer will issue the paper at $4,985,000 at a fee of $2,000 in advance. ..

  Evaluating a project that requires an initial investment

You are evaluating a project that requires an initial investment of $225,000 and has equal annual cash inflows of $85,000 each year for the next five years. What is the payback period?

  About the miraculous recovery

Phoenix Industries has pulled off a miraculous recovery. Four years ago it was near bankruptcy. Today, it announced a $1 per share dividend to be paid a year from now, the first dividend since the crisis. If the firm’s investors expect to earn a retu..

  Use put–call parity

It is possible to buy three-month call options and three-month puts on stock Q. Both options have an exercise price of $78 and both are worth $28. If the interest rate is 5.00% a year, what is the stock price?

  What is fourniers current cost of equity

If the firm shifts its capital structure to a less highly leveraged position by selling preferred stock and using the proceeds to retire debt, it expects its beta to drop to 1.20. What is its cost of equity in this case?

  Future real estate prices affected interest rates

Why would a government choose to issue a perpetuity which requires payment forever, instead of a terminal loan, such as a fixed-payment loan, discount bond or coupon bond? what effect will a sudden increase in peoples expectations of future real esta..

  Calculate the present value of year six cash flow

A firm purchases a depreciable asset at year 0 at price $148, which is uses during the assets of 6 years, and the asset is depreciated according to a double declining balance depreciation. At the end of the year 6, the firm sells the asset at price $..

  Find the bonds current value

What is the purchase price of a $1,000 bond that is maturing in 20 years at 12% interest if the required rate of return is 15%?

  Interested in knowing what type of interest payment

Your broker is suggesting that you purchase a 20-year Industrial Business Machines bond that is selling for $9,120. The face value on the bond is $10,000 and your broker tells you that the bond has a yield to maturity of 10.7%. what is the coupon rat..

  Yield to maturity on debt issues with risk comparable

Yield to maturity (YTM) on debt issues with risk comparable to the Sonar Company is currently 9.2%. Sonar has issued debt two years ago with a YTM of 8.00%. Sonar's common stock beta is 1.15, and its tax rate is 34. The appropriate rate for Sonar to ..

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