A fund manager at a brokerage firm

Assignment Help Finance Basics
Reference no: EM13242625

You have just taken over as a fund manager at a brokerage firm. Your assistant, Thomas, is briefing you on the current portfolio and states "We have too much of our portfolio in Alpha. We should probably move some of those funds into Gamma so we can achieve better diversification." Is he right? [Hint: Feel free to use spreadsheet statistical functions.] Here is the data on all three stocks. Assume, for convenience, that all three securities do not pay dividends. Alpha, Current Price 40; Current Weight 80%; Next Year's Price: Expansion 48, Normal 44, Recession 36; Beta, Current Price 27.50; Current Weight 20%; Next Year's Price: Expansion 27.50, Normal 26, Recession 25; Gamma, Current Price 15; Current Weight 0%; Next Year's Price: Expansion 16.50, Normal 19.50, Recession 12.
No.
Yes.
It depends.

I also need the excel forumlas 

Reference no: EM13242625

Questions Cloud

What is optimal amount for the firm to spend on advertising : The Wilson Company's marketing manager has determined that the price elasticity of demand for its product equals -2.2. According to studies he carried out, the relationship between the amount spent by the firm on advertisin
What angle does the protons velocity make with b : A proton with v = 322 m/s is moving through a region in which the magnetic field is B = 2.2 T, what angle does the protons velocity make with B
Calculate the exact integration result using matlab : Calculate the exact integration result using Matlab symbolic tools and calculate the errors in calculating work done
Between 1935 and 1943-the workers progress administration : Which of the following states was most affected by population migrations during World War II? Between 1935 and 1943, the Workers Progress Administration. The 1973 Paris Peace Accords led to the
A fund manager at a brokerage firm : You have just taken over as a fund manager at a brokerage firm.
Define what is the percent-yield of h2 : What is the percent-yield of H2 In the reaction below when an equimolar mixture of CH4 and CO2 with an initial total pressure of 20.0 atm reaches equilibrium at 1200. K, at which Kp = 3.548 x 106
Calculate the value of the marginal product for each worker : Calculate the marginal product for each additional worker Each unit of output sells for $10. Calculate the value of the marginal product for each worker. Graph the firm's demand schedule.
Compute the heat supplied to maintain a constant temperature : Four kilomoles of a monatomic ideal gas are at a temperature of 300 K, Compute the heat supplied to maintain a constant temperature
Describe a dioxin-contaminated water source : A dioxin-contaminated water source contains 0.081% dioxin by mass. How much dioxin is present in 4.2 L of this water? (Assume that the density of the solution is 1.01 g/mL.)

Reviews

Write a Review

Finance Basics Questions & Answers

  Calculating contribution per hour

Joe runs a little parts shop. His hourly labor price to customers is $40 every hour and his hourly material value works out to about 25 percent of the hourly labor price.

  Finding future value and present value

Dr. J. wishes to purchase a Dell computer which will cost $2,788 four years from today. He would like to set aside an equal amount at the end of each year in order to accumulate the amount required.

  Determine which bond you purchase

Given the opportunity to invest in one of the three bonds given below, which would you purchase? Suppose an interest rate of 7 percent.

  Computation npv and payback period and irr

Computation NPV and Payback Period and IRR and Selection of the Project and Summarise the preference dictated by each measure, and indicate which project you would recommend

  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

  Drivers to cash flow

Recognize two key drivers to cash flow. How do such drivers impact corporate value? Illustrate out the term market efficiency. Write down the name of some of ambiguities which are encountered in accounting on an accrual basis?

  Estimate expected rate of return on company stock

Waterworks has a dividend yield of 8%. If its dividend is expected to grow at a constant rate of 5%, Estimate the expected rate of return on the company's stock?

  Computation of payback period and npv

Computation of payback period and NPV If your esquire a payback period of two years, will you make the movie

  Calculate the net present value and internal rate of return

You put $800 into an investment that pays $70 in year 1, $70 in year 2, $190 in year 3 and $680 in year 4. The cost of capital is 9 percent. Calculate the net present value and internal rate of return of the investment

  Election of directors through cumulative voting procedure

Blue Moon Company has one million shares of common stock outstanding. In a typical annual election for the board of directors, shareholders representing 70% of shares outstanding exersize their right to vote.

  Find approximate total amount of money

XYZ Motors just issued 225,000 zero coupon bonds. These bonds mature in twenty years, have a par value of $1,000, & have a yield to maturity of 7.45%.

  Compute the stocks justified price

A corporation's stock sells at a P/E ratio of 21 times earnings. It is expected to pay dividends of $2 each share in each of the next 5 years and to generate an EPS of $5 in five years.

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