Pass tangent line from the risk free point

Assignment Help Financial Management
Reference no: EM131915008

Economics

1-Construct the portfolio Mean Variance Frontier with the following data:

stock A

Average Return of A = 0.18

Standard Deviation = 0.06

stock b

Average Return of B = 0.09

Standard Deviation = 0.04

Correlation coefficient = 0.025

Risk free rate = 0.04

2. Pass a tangent line from the Risk free point (0.04) which will be tangent to the frontier.

Reference no: EM131915008

Questions Cloud

What is the yearly debt to equity ratio : What is the yearly Debt to Equity Ratio of Marriott International, Inc. (NMS: MAR) in the year: A. 2012 B. 2013 C. 2014 D. 2015 E. 2016.
What is pfizer cost of equity based on dividend growth model : What is Pfizer's cost of equity based on the dividend growth model? What is Oracle's cost of equity based on the dividend growth model?
Cash-value coverage and replacement cost coverage : How much would a homeowner receive with actual? cash-value coverage and replacement cost coverage for a? three-year old sofa destroyed by a? fire?
How much will his homeowner insurance policy pay : how much will his homeowner's insurance policy pay?
Pass tangent line from the risk free point : Pass a tangent line from the Risk free point (0.04) which will be tangent to the frontier.
Evaluate the business strategy of royal dutch shell : Under the current news around the oil price fluctuations, to evaluate the business strategy of Royal Dutch Shell PLC.
How much of her total losses and expenses will be reimbursed : How much of her total losses and expenses will be reimbursed if she has a? $1,000 deductible?
Calculate the interest coverage ratio for firm : Coupon payments are made annually. The firm's EBITDA is $750 per year. Calculate the interest coverage ratio for this firm.
Provide professional and financially sound critique : Memo Assignment-Provide a professional and financially sound critique where you identify the problem(s), if any, with her investment analysis.

Reviews

Write a Review

Financial Management Questions & Answers

  What was the company cash flow

The company has $5.0 million interest expense and the corporate tax rate is 40 percent. What was the company's cash flow?

  What is the firms expected long-term growth rate in earnings

Clothing retailer Abercrombie & Fitch enjoyed phenomenal success in the late 1990s. Between 1996 and 2000, its sales grew almost fourfold, from $335 million to more than $1.2 billion, and its stock price soared by more than 500%. What are the mean an..

  How much can he spend each year after he retires

Your older brother turned 35 today, and he is planning to save $30,000 per year for retirement, with the first deposit to be made one year from today. He will invest in a mutual fund that's expected to provide a return of 7.5% per year. He plans to r..

  Balance sheet equity-income statement shows net income

Fly Away, Inc., has balance sheet equity of $5.5 million. At the same time, the income statement shows net income of $803,000. The company paid dividends of $445,665 and has 100,000 shares of stock outstanding. If the benchmark PE ratio is 19, what i..

  What is the value of this firm

The Smith Vacations Company has expected earnings before interest and taxes of $2,100 per year in perpetuity, What is the value of this firm?

  What should the bond be selling for two years

what should the bond be selling for two years from now? The bond pays interest semiannually.

  What is the net present value of this investment

Assume that your company considering installing a new computer system that could reduce labor costs by $25,000 each year over the next five years. The purchase price (including installation and testing) of the new system is $105, 250. What is the Net..

  An irrigation system is being considered with first cost

An irrigation system is being considered with a first cost of $200,000 with (current) annual maintenance costs of $2,000. The irrigation system is expected to bring $22,000 per year in additional (current) revenues. Using the current cash flows, find..

  Arithmetic average growth rate in dividends

Suppose Stark Ltd. just issued a dividend of $2.14 per share on its common stock. The company paid dividends of $1.80, $1.89, $1.96, and $2.07 per share in the last four years. If the stock currently sells for $60, what is your best estimate of the c..

  How much will you have on the day of your last investment

Investing the money in an account that return 6% per year. How much will you have on the day of your last investment?

  Expected to keep growing indefinatly

Steves specialties inc paid its dividend yesterday, which was $3.50. The dividend has been growing at a rate of 0.010 and is excpected to keep growing indefinatly at that rat. Steves common stock is currently trading at $22.00 per share. The firms be..

  What is the standard deviation of two-asset portfolio

What is the standard deviation of a two-asset portfolio comprised of Stock A and Stock B if both Stock A and Stock B have a variance of 0.2209, the correlation coefficient between the two stocks is -0.17, and Stock A makes up 24% of the portfolio?

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