Risk-free rate of return

Assignment Help Business Management
Reference no: EM131266761

Need help with a quiz. I answered a few questions and need help with the following:

1: In order to fund her retirement, Michele requires a portfolio with an expected return of 0.11 per year over the next 30 years. She has decided to invest in Stocks 1, 2, and 3, with 25 percent in Stock 1, 50 percent in Stock 2, and 25 percent in Stock 3. If Stocks 1 and 2 have expected returns of 0.11 and 0.11 per year, respectively, then what is the minimum expected annual return for Stock 3 that will enable Michele to achieve her investment requirement?

2: Lee purchased a stock one year ago for $25. The stock is now worth $33, and the total return to Lee for owning the stock was 0.36. What is the dollar amount of dividends that he received for owning the stock during the year?

3: The beta of M Simon Inc., stock is 1.5, whereas the risk-free rate of return is 0.10. If the expected return on the market is 0.16, then what is the expected return on M Simon Inc?

4: London purchased a piece of real estate last year for $84,900. The real estate is now worth $103,500. If London needs to have a total return of 0.21 during the year, then what is the dollar amount of income that she needed to have to reach her objective?

5:The risk-free rate of return is currently 0.05, whereas the market risk premium is 0.05. If the beta of RKP, Inc., stock is 1.9, then what is the expected return on RKP?

Reference no: EM131266761

Questions Cloud

The amount she had previously identified as bad debt : Last year, Jane identified $66,400 as a nonbusiness bad debt. In that tax year before considering the tax implications of the nonbusiness bad debt, Jane had $132,800 of taxable income, of which $6,640 consisted of short-term capital gains. This year,..
Define the anthropocentrism and ecocentrism concept : Define the concept and detail how it relates to environmental ethics using scholarly sources to back your statements. Provide an example of each concept that illustrates knowledge of the concept.
Risk manager of an accountable care organization : Imagine that you are the risk manager of an accountable care organization. Select one never event from the list on page 79 and describe how you would institute proactive monitoring for POAs. For this discussion:
Error in computing depreciation expense : Due to an error in computing depreciation expense, Crote Corporation understated accumulated depreciation by $78 million as of December 31, 2016. Crote has a tax rate of 35%. Crote's retained earnings as of December 31, 2016, would be
Risk-free rate of return : The beta of M Simon Inc., stock is 1.5, whereas the risk-free rate of return is 0.10. If the expected return on the market is 0.16, then what is the expected return on M Simon Inc?
Proposal present an ethical dilemma : The management of the Auto Parts Division of the Santana Corporation receives a bonus if the division's income achieves a specific target. For 2003 the target will be achieved by a wide margin. Does Mary Beth's proposal present an ethical dilemma? If..
Firm failed to record premium amortization : In the previous year, a firm failed to record premium amortization of $40,100 and $28,900, respectively, on its bonds payable and held to maturity bond investments. These errors affect both income before tax and taxable income. The firm's tax rate is..
Would they stay or move to a more suitable environment : Make a list identifying at least ten organisms-at least five plants and five animals-that live in your biome, and describe how these organisms interact with one another. For example, is the relationship competitive or symbiotic?
Determine breadth and pitch factors for a 3-phase winding : Determine the breadth and pitch factors for a 3-phase winding with 2 slots per pole per phase. The coil span is 5 slot-pitches. If the flux density wave in the air-gap consists of the fundamental and a 24% third-harmonic, calculate the percentage ..

Reviews

Write a Review

Business Management Questions & Answers

  Cann is physically located in the united state

The internet is worldwide. Currently, ICANN is physically located in the United States. Do you think that some countries might resent this? Do you think ICANN is really necessary? Why? Find out if there has been discussion about this, and what might ..

  Designing surveys to set pays for employees and managershow

designing surveys to set pays for employees and managershow would you design a survey for setting pay for employees and

  Confident in the fact that permissions

All appears to be well with the move, so you turn of your cell phone and go to lunch, confident in the fact that permissions were inherited.

  This question is for management science 430 its chapter 15

this question is for management science 430 . its chapter 15 question 19 a thru c. the book its from is an introduction

  A level of significance dictated by upper management

A statistician was setting up a hypothesis test with a level of significance dictated by upper management. However, she was concerned that the test she wished to perform might have unacceptable large possibilities of Type II error, ß. Which of the..

  How can managers improve their perceptual skills

1. How can managers improve their perceptual skills? Provide examples from your own experience or knowledge.

  Illustrate what is a services cape

Illustrate what is a services cape? Explain how is it related to the retail layout problem? Illustrate what are the three elements of services cape for dealing with these human issues

  Cost to government for imposing the estate tax

1. What is the cost to government for imposing the estate tax? 2. What is the cost to the taxpayer for imposing the estate tax on him? 3. Does this case have to do with the ability-to-pay principle?

  Memorandum of understanding and letter of intent

Describe and compare and contrast the buyer's and seller's actions in the control procurement phase of the contract management process. Give an example for each. Describe a memorandum of understanding and letter of intent

  Determining accuracy of salespeoples reportshow can a sales

determining accuracy of salespeoples reportshow can a sales manager determine the accuracy of salespeoples reports? if

  Graph the lorenz curve and calculate the gini coefficient

Graph the Lorenz curve and calculate the Gini coefficient for this economy?

  Soda pop industry profitability economics of concentrate1

soda pop industry profitability economics of concentrate1. why historically has the soft drink industry been so

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