Invest in a portfolio containing stock

Assignment Help Financial Management
Reference no: EM13939463

You have $128,000 to invest in a portfolio containing Stock X and Stock Y. Your goal is to create a portfolio that has an expected return of 19.8 percent. Stock X has an expected return of 18 percent and a beta of 1.20, and Stock Y has an expected return of 13.0 percent and a beta of 1.00. How much money will you invest in stock Y? What is the beta of your portfolio?

Reference no: EM13939463

Questions Cloud

Design process creative and analytical study : Design Process Creative and analytical study of: a. Contextual Analyses The environmental, geomorphic character and the existing land and planning constraints of the site.
Discuss the importance of confidentiality consent : After reading your textbook assignment, please discuss the importance of confidentiality and informed consent. Describe any experiences you may have in situations where the processes for confidentiality and informed consent were handled well and a..
Calculate tax paid on gain on disposal : Genetic Insights Co. purchases an asset for $17,234. This asset qualifies as a seven-year recovery asset under MACRS. The seven-year fixed depreciation percentages for years 1, 2, 3, 4, 5, and 6 are 14.29%, 24.49%, 17.49%, 12.49%, 8.93%, and 8.93%, r..
What point disease become epidemic, endemic, or pandemic : At what point does a disease become an epidemic, endemic, or pandemic? What are the parameters that define each of these states of a disease's effect?
Invest in a portfolio containing stock : You have $128,000 to invest in a portfolio containing Stock X and Stock Y. Your goal is to create a portfolio that has an expected return of 19.8 percent. Stock X has an expected return of 18 percent and a beta of 1.20, and Stock Y has an expected re..
What is the cost of common equity from retained earnings : Assume that you are a consultant to Tintle Inc., and you have been provided with the following data: D1 = $0.81; P0 = $23.43; g = 4.00% (constant). What is the cost of common equity from retained earnings based on the DCF approach?
Join operation in sql joins the data : The Join operation in SQL joins the data for from two table to make one intermediate table. Join expressions can be complex with multiple conditions to control the joining of tupples. In addition to standard joins, there are also specialiased Join..
The risk-free interest rate is zero : A call option with X = $51 on a stock currently priced at S = $54 is selling for $8. Using a volatility estimate of σ = 0.34, you find that N(d1) = 0.7311 and N(d2) = 0.6722. The risk-free interest rate is zero. Is the implied volatility based on the..
Understanding of compressible fluids : Gases are different fluids from liquids in that they are compressible. The understanding of compressible fluids is important not only for general transport purposes but also in the operation of safety systems. i.e. pressure relief, bursting discs,..

Reviews

Write a Review

Financial Management Questions & Answers

  Municipal bond with a coupon rate

A municipal bond with a coupon rate of 4.80 percent sells for $4,850 and has five years until maturity. What is the yield to maturity of the bond?

  Using MACRS depreciation method

Casa Grande Farms is considering purchasing multiple tractors for a total purchase price of $540,000. These tractors are expected to generate EBITDA of $250,000 for each of the next three years. Assuming that Casa Grande Farms depreciates these tract..

  Prepared to make monthly payments

You are prepared to make monthly payments of $390 beginning at the end of this month into an account that pays 8% interest compounded monthly. how many payments will you have made when your account balance reaches $30,000?

  What will be the annual interest cost

Blandet Company has $4,000,000 in assets. It has decided to finance 30% with long term financing (9%rate) and 70% with short-term financing (7%) rate. What will be the annual interest cost?

  When a firm is evaluating the introduction of a new product

The depreciation is best defined as the: A university converted the bottom 3 floors of an apartment building they own to classrooms. The option that is forgone so that the university can utilize it for classroom is: When a firm is evaluating the intr..

  Identify the clients complex broking needs

Identify the clients complex broking needs - Develop complex broking options and developing and nurturing relationships with clients, other professionals and third party referrers

  P-e ratio gives us simple way to conduct equity valuation

P/E ratio gives us a simple way to conduct equity valuation, but there are still some shortcomings in P/E analysis. What are the potential shortcomings when we use P/E ratio to evaluate equity price? What are the alternative valuation ratios/models t..

  What is discounted payback period for these cash flows

An investment project has annual cash inflows of $4,900, $3,400, $4,600, and $3,800, for the next four years, respectively. The discount rate is 13 percent. What is the discounted payback period for these cash flows if the initial cost is $5,200?

  Analysts expect future dividends to grow

Michigan Co. just paid a dividend of $2.00 per share. Analysts expect future dividends to grow at 20% per year for the next four years and then grow at 6% per year thereafter. Calculate the expected dividend in year 5.

  Value of money and its applicability yielded

When the Genesis Energy and Sensible Essential teams held their weekly meeting, the time value of money and its applicability yielded an extremely stimulating discussion.

  What is the financial leverage effect and what causes it

What is the financial leverage effect and what causes it?  What are the potential benefits and negative consequences of high financial leverage?

  What is the full selling price of a globe with mark-up

The Falling Snow Company is considering production of a lighted world globe that the company would price at a mark-up of 0.30 above full cost. Management estimates that the variable cost of the globe will be $68 per unit and fixed costs per year will..

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