Portfolio equally invested in a risk-free asset

Assignment Help Financial Management
Reference no: EM13928848

You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1.56 and the total portfolio is equally as risky as the market, what must the beta be for the other stock in your portfolio? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Reference no: EM13928848

Questions Cloud

Programming in a non-linear fashion : Question: - What exactly does that mean, however? Is there an inherent advantage to programming in a non-linear fashion as opposed to a more linear procedural approach? In what situations would you think object-oriented programming would be superi..
Discussion waves : It is time to take on the role of a scientist again. Do not look up the following, or concern yourself with being wrong or right. Just use your imagination.
Stock has an expected return : A stock has an expected return of 12.2 percent, the risk-free rate is 4 percent, and the market risk premium is 10 percent. What must the beta of this stock be? (Do not round intermediate calculations and round your final answer to 2 decimal places. ..
What is the central dogma of molecular biology : What is the central dogma of molecular biology? Please answer in a paragraph.
Portfolio equally invested in a risk-free asset : You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1.56 and the total portfolio is equally as risky as the market, what must the beta be for the other stock in your portfolio?
What are the three steps of translation : What are the three steps of translation and what happens within each step?
Gold futures contract with current price : A gold futures contract with current price $650 has a maturity of two years. If the T-bill rate is 4%, what should the futures price be?
Physical examination : HEENT: normocephalic, symmetric. Evidence of prior cataract surgery in both eyes. PERRLA, EOMI, cerumen impaction bilateral ears. Several broken teeth, loose partial plate.
Preparing savings plan to meet the objectives : Ms. Ieda Silva plans to retire in 30 years and expects to live for 20 years after retirement. She is preparing a savings plan to meet the following objectives. First, after retirement she would like to be able to withdraw $20,000 per month. How much ..

Reviews

Write a Review

Financial Management Questions & Answers

  Payback period as a means of measuring cash flows

What are the problems associated with using the payback period as a means of measuring cash flows? What are the advantages of using the payback period to evaluate cash flows and are there any circumstances under which using the payback might be appro..

  Best the market and hold the market

In what instances would an investor want to "best the market" and "hold the market"? Discuss the strategies for each and their dependence on an investor's information and trading skills.

  Issuing new common stock to raise investment funds

Issuing new common stock to raise investment funds is more expensive than using retained earnings as the funding source

  What is the apr and rear of this non-free trade credit

Suppose a firm makes purchases of $120,000 per year under terms of 2/15, net 40. If the firm does not take discounts and stretches its payments to 55 days, what is the APR and rEAR of this non-free trade credit?

  Standard deviation of the portfolio return

You have a 2-stock portfolio with a total value of $510,000. $195,000 is invested in Stock A and the remainder is invested in Stock B. If standard deviation of Stock A is 19.90%, Stock B is 9.35%, and correlation between Stock A and Stock B is –0.60,..

  Make sure you put interest in months

You have budgeted a maximum of $250 per month for a car loan. (a) If your bank offers financing terms of 60 months at a yearly 12% interest, what is the most you can pay for a car? Do not put a $ or comma in your answer. Make sure you put interest in..

  Compute milts recognized gain or loss on the sale

Milt Payner purchased an automobile several years ago for $40,000 and has held it as a personal asset ever since. This year he sold the automobile. Compute Milt's recognized gain or loss on the sale if: a. Milt's amount realized on sale was $28,300. ..

  What is the projects profitability index

A project has an initial cost of $40,000, expected net cash inflows of $9,000 per year for 7 years, and a cost of capital of 11%. What is the projects profitability index? What is the projects payback? What is the projects discounted payback?

  About the huge cash reserves the companies accumulate

Shareholders of some companies occasionally complain about the huge cash reserves the companies accumulate. And, sometimes (Wal-Mart in 2007, Apple in 2013) firms indeed satisfy investor concerns and announce plans to distribute substantial portions ..

  Create a budget for the set design and construction project

Create a budget for the set design and construction project and why don't you need to take into account fringe benefit costs for the workers?

  Which one of the following is the prime objective of a resid

Which one of the following is the prime objective of a residual dividend policy? _______ Maintaining a stable dividend Increasing the dividend at a steady pace Meeting the firm's investment needs   Maintaining a stable dividend payout ratio

  What will be the steady state receivables balance

Suppose that a clinic has third-party payer revenues of $10,000 a day. On average, it takes the clinic 50 days to collect from its payers. What will be the steady state receivables balance?

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