Determine the expected return

Reference no: EM1339538

A stock has a beta of 1.25 and an expected return of 14%. A risk free asset currently earns 2.1%.

1) What is the expected return on a portfolio that is equally invested in two assets?

2) If a portfolio of the two assets has a beta of .93 what are the portfolio weights?

3) If a portfolio of the two assets has an expected return of 9% what is the beta?

4) If a portfolio of the two assets has a beta of 2.50, what are the portfolio weights? How do you interpret the weights for the two assets in this case?

Reference no: EM1339538

Questions Cloud

Explain copyright and privacy in it : Explain Copyright and Privacy in IT and What is the difference between a copyright and a patent on a computer program

Calculate the expected return on the stock : A stock has a beta of 1.05, the expected return on the market is 10% and the risk-free rate is 3.8%. Calculate the expected return on the stock

Illustrate what economic events or changes : Illustrate what economic events or changes will "shift" demand and supply curves, and separately "move" demand or supply along their respective curves.

Developing a cost schedule for total project cost : Develop a cost schedule for total project cost from finishing in the normal time to maximum crashing, ie. cost to finish in normal time , cost if crashed one week, cost if crashed two weeks, etc. to minimum time to complete.

Determine the expected return : Determine the expected return on a portfolio that is equally invested in two assets

Evaluate capital projects : Of the six key methods used to evaluate capital projects, which one do you prefer?

Good practice to acknowledge limitation of research : Many will argue that it is considered a good practice to acknowledge the limitation of your research/project.

Explaining member of a manager-managed llc : Eric is a member of a manager-managed LLC but is not a manager. This LLC invests in real estate and manages it as rental property in a college town.

Participate in management and entitled to compensation : Lynda will be allowed to participate in management and is entitled to compensation.

User Account

All Pages