What is the minimum expected annual return for stock

Assignment Help Finance Basics
Reference no: EM13298758

In order to fund her retirement, Glenda requires a portfolio with an expected return of 12 percent 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 3. If Stocks 1 and 2 have expected returns of 9 percent and 10 percent per year, respectively, then what is the minimum expected annual return for Stock 3 that will enable Glenda to achieve her investment requirement?

Reference no: EM13298758

Questions Cloud

Calculkate how far should the mirror be from the wall : A luminous object is 3.60m from a wall. You are to use a concave mirror to project an image of the object on the wall, How far should the mirror be from the wall
What is the cubic feet of gas storage space in fault block : After injecting 50 MMSCF (14.7 psia and 60 oF), the pressure increase from 2500 to 3500 psia. Deviation factors for the gas are 0.90 at 3500 and 0.80 at 2500 psia and the bottom-hole temperature is 160 oF. What is the cubic feet of gas storage spa..
What does it mean to be human-how do you define personhood : What does it mean to be human? How do you define personhood? How does one's understanding of what it means to be human influence ethical and moral decisions in nursing and health care?
What is the present value of a monthly payment : If you were to save $5000 every year for the next ten years, and you could invest at a rate of 12% on average, what would be the total value of your investment in 10 years?
What is the minimum expected annual return for stock : If Stocks 1 and 2 have expected returns of 9 percent and 10 percent per year, respectively, then what is the minimum expected annual return for Stock 3 that will enable Glenda to achieve her investment requirement?
Why is wood more common in residential construction in us : why is wood more common in residential construction in the US and concrete more common in commercial construction
What is the frequency for given channel : TV-reception antennas for VHF (channels 2 through 13) are constructed with cross wires supported at their centers, What is the frequency for channel 4
What is your expected starting salary : Without considering the additional educational years or the time value of money, what is your expected starting salary as well as the standard deviation of that starting salary?
Find the apogee distance : An Earth satellite has a speed of 28100 km/hr when it is at its perigee, 281 km above Earth's surface. Find the apogee distance

Reviews

Write a Review

 

Finance Basics Questions & Answers

  What is the npv for the following project

What is the NPV for the following project if its cost of capital is 15 percent and its initial after tax cost is $5,000,000 and it is expected to provide after-tax operating cash inflows of $1,800,000 in year 1, $1,900,000 in year 2, $1,700,000 in..

  What is fargo average collection period

Fargo Memorial Hospital has annual net patient service revenues of $14,400,000. It has two major third-party payers, plus some of its patient is self-payers.

  What is the present value of this perpetuity

Suppose that you have a growing perpetuity that starts next year with a $166.91 payment, grows at 7.6% and has a discount rate of 14.3%. What is the present value of this perpetuity?

  What is anton return on equity

Anton's Coffee Shop has a return on assets of 12%. Anton's assets = $100 while Anton's owner's equity = $40 and its debt equals $60. What is Anton's return on equity?

  Capm to calculate the cost of equity capital

Wyden Brothers uses the CAPM to calculate the cost of equity capital. The company's capital structure consists of common stock, preferred stock, and debt.

  Explain what is the alpha for the fad followers

Explain what is the alpha for the fad followers and provide your answer as a percentage to two decimal places

  Computation of earnings before interest and taxes

Computation of earnings before interest and taxes based on sensitivity analysis and the fixed and variable cost estimates are considered accurate within a plus or minus 6% range

  Determine growth rate in dividends

The Jon's Shoe corporation, whose common stock is currently selling for $40 each share, is expected to pay a $2.00 dividend in the coming year. If investors believe that the expected rate of return on XYZ is 14 percent,

  What is the option value

The annual risk-free rate is 6.0%, based on daily compounding. A1-year call option on the stock, with an exercise price of $22, is available. Based on the binomial model, what is the option's value.

  What is the minimal amount you should bid per park

Your required rate of return is 15 percent and your tax rate is 40 percent. What is the minimal amount you should bid per park?

  The capital asset pricing model

Assume that the stock of the new cologne manufacturer, Eau de Rodman, Inc., has been forecast to have a return with standard deviation .30 and a correlation with the market portfolio of .9.

  Question on stock repurchase

Beta Industries has a net income of $2,000,000 and it has $1,000,000 shares of common stock outstanding. The company's stock currently trades @$32 a share.

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