Portfolio expected return-money will you invest in stock

Assignment Help Financial Management
Reference no: EM131354101

Portfolio Expected Return. You have $250,000 to invest in a stock portfolio. Your choices are Stock H, with an expected return of 12.9 percent, and Stock L, with an expected return of 9.8 percent. If your goal is to create a portfolio with an expected return of 11.1 percent, how much money will you invest in Stock H? In Stock L?

Reference no: EM131354101

Questions Cloud

What is present value of this annuity : If you start making $205 monthly contributions today and continue them for four years, what is their future value if the compounding rate is 11.50 percent APR? What is the present value of this annuity?
Market values of these comparable firms : The analyst should be careful not to mechanically add an acquisition premium to the target firm’s estimated value based on the comparable companies’ method if there is evidence that the market values of these “comparable firms” already reflect the ef..
What is company new cost of equity : Gamer Co. has no debt. Its cost of capital is 10.4 percent. Suppose the company converts to a debt–equity ratio of 1. The interest rate on the debt is 7.5 percent. Ignore taxes for this problem. What is the company’s new cost of equity? What is WACC?
Considering purchasing bonds with par value : Emma is considering purchasing bonds with a par value of ?$10,000. The bonds have an annual coupon rate of8?%and six years to maturity. The bonds are priced at $9,550. If Emma requires a 10?% return, should she buy these? bonds? If Emma requires a 10..
Portfolio expected return-money will you invest in stock : Portfolio Expected Return. You have $250,000 to invest in a stock portfolio. Your choices are Stock H, with an expected return of 12.9 percent, and Stock L, with an expected return of 9.8 percent. If your goal is to create a portfolio with an expecte..
Compute the dividends until the dividend growth is constant : You are doing a valuation the stock of Big Taco Inc. a Mexican fast food company. Big Taco just paid an annual dividend of $5.25. You expect the dividend to grow by 15% next year, 10% in the following year, 7.5% for the next 3 years, then 6% and then..
Company offers her buyout of her retirement plan : Rachel is currently 55 years old and has a retirement plan where she will receive a 30 year annuity with an annual payment of $50,000 starting in year 10 (at age 65) that will continue until she is 94 years old (30 payments total). Rachel’s company o..
Company is purchasing some new research equipment : The Don'tMissSnow Company is purchasing some new research equipment today for $100,000. For depreciation purposes, it falls into the 3-year MACRS class. So depreciation rates are 33%, 45%, 15%, and 7%, respectively for years 1 through 4 of the asset'..
What is value of the swap to the party paying dollars : A currency swap has a remaining life of 15 months. It involves exchanging interest at 11% on £51 million for interest at 6% on $40 million once a year. The current exchange rate (dollars per pound sterling) is 1.55. What is the value (in millions of ..

Reviews

Write a Review

Financial Management Questions & Answers

  About the two-asset portfolio

Stock A has an expected return of 13% and a standard deviation of 35%. Stock B has an expected return of 19% and a standard deviation of 60%. The correlation coefficient between Stocks A and B is 0.2. What is the expected return of a portfolio invest..

  Increase tax shield without changing the firm size

AP Corp has a WACC of 12%. The firm has a D/E ratio of .2. The cost of debt is 6%. Tax rate is 40%. Because of the profit has been growing in the last 3 years, the firm is considering increasing the tax shield. a. What can AP Corp do to increase tax ..

  What is your one-year return

Your company sponsors a 401(k) plan into which you deposit 12 percent of your $65,000 annual income. Your company matches 50 percent of the first 5 percent of your earnings. You expect the fund to yield 8 percent next year. If you are currently in th..

  Expected return and risk-free rate

You have $100,000 to invest in either Stock D, Stock F, or a risk-free asset. You must invest all of your money. Your goal is to create a portfolio that has an expected return of 12.3 percent. Assume D has an expected return of 15.8 percent, F has an..

  What is your portfolio return and present value

Portfolio Return At the beginning of the month, you owned $11,700 of Company G, $11,600 of Company S, and $18,200 of Company N. The monthly returns for Company G, Company S, and Company N were 10.8 percent, -1.41 percent, and 9.4 percent. What is you..

  What will be the effect on profit of accepting the order

PowerDrive, Inc. produces a hard disk drive that sells for $175 per unit. The cost of producing 25,000 drives in the prior year was: At the start of the current year, the company received an order for 3,400 drives from a computer company in China. Ma..

  Prepare a statement of cash flows

Prepare a balance sheet from the following information. What is the net working capital and debt ratio? - prepare a statement of cash flows.

  The purchase of bear stearns so controversial

Why did Treasury Secretary Paulson want Bear Stearns to sell for such a low price?- Why was the decision by the Fed to orchestrate the purchase of Bear Stearns so controversial?

  Extra cost or savings of switching over to level production

Determine the extra cost or savings of switching over to level production.- How low would interest rates need to fall before level production would be feasible?

  Payable over five years with monthly payments

A loan of 100,000 is payable over five years with monthly payments of 60,000 commencing one month after the inception date. The loan repayment is 2,000 per month and the nominal rate 10 per cent. How much capital remains at the end of five years? bui..

  One-year zero-coupon bond with face value

A one-year zero-coupon bond with face value $100 is trading at $91.4077; a two-year bond with 10% annual coupons and face value $100 is trading at $102.2373; Calculate the 1, 2, 3, 4−year spot interest rates corresponding to these bond prices.

  What is the percentage change in the price of these bonds

Bond J has a coupon rate of 4.4 percent. Bond S has a coupon rate of 14.4 percent. Both bonds have twelve years to maturity, make semiannual payments, and have a YTM of 9.8 percent. If interest rates suddenly rise by 2 percent, what is the percentage..

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