Portfolio weight of stock-expected return of portfolio

Assignment Help Financial Management

Reference no: EM13951475

Stock J has a beta of 1.38 and an expected return of 14.06 percent, while Stock K has a beta of 0.93 and an expected return of 11 percent. You want a portfolio with the same risk as the market. What is the portfolio weight of each stock? What is the expected return of your portfolio?

Reference no: EM13951475

Questions Cloud

Calculate the investments expected return : Montgomery College is evaluating making an investment with a portion of the principle from its endowment fund. Calculate the investment's expected return if there's a 40% probability of a 10% return, a 30% probability of a 9% return, and a 15% probab..

Put-call-forward parity and range forward positions : Put-call-forward parity and range forward positions both involve the purchase of a call option and the sale of a put option (or vice versa) on the same underlying asset. Describe the relationship between these two trading strategies. Is one a special..

Explain the cultural relevance of the article : To successfully complete this essay, you will need to answer the following questions: Explain the cultural relevance of the article. Who funded this magazine? What are their political biases? What is the main point of the article? What is the writer'..

Portfolio weight of stock-expected return of portfolio : Stock J has a beta of 1.38 and an expected return of 14.06 percent, while Stock K has a beta of 0.93 and an expected return of 11 percent. You want a portfolio with the same risk as the market. What is the portfolio weight of each stock? What is the ..

The dividends paid to the stocks in the underlying index : Since their introduction, stock index futures contracts have become very popular and are now widely traded by finance professionals. Many factors, including (1) the current price of the underlying stock index, (2) the time to contract maturity, and (..

Annual return consistently-future value : You elect to make an $80 contribution to your 401k from each bi-weekly paycheck. Your 401k has been producing an 8% annual return consistently. If you are retiring in 32 years, how much will you have accumulated in your 401k for your retirement?

Contrast the gain and loss potential for investors : Compare and contrast the gain and loss potential for investors holding the following positions: long forward, short forward, long call, short call, long put, and short put. Indicate what the terms symmetric and asymmetric mean in this context.

What savings in year three is needed to make alt : Your company evaluates proposals using a 2.5-year payback period. You have two alternatives for a new boring machine. Alt. A costs $10,000 and will last for six years. Alt.A will save $5,000 in year one and $2,000 in year two. What savings in year 3 ..

User Account

All Pages