The risk-free asset

Assignment Help Finance Basics
Reference no: EM13506177

You want your portfolio beta to be 0.90. Currently, your portfolio consists of $4,000 invested in stock A with a beta of 1.47 and $3,000 in stock B with a beta of 0.54. You have another $9,000 to invest and want to divide it between an asset with a beta of 1.74 and a risk-free asset. How much should you invest in the risk-free asset?

Reference no: EM13506177

Questions Cloud

Explain reactions from the standard enthalpies of formations : Calculate the heats of combustion for the following reactions from the standard enthalpies of formations listed in appendix 3: (a) 2H2(g) + O2(g) = 2H2O(l) (b) 2C2H2(g) + 5O2(g) = 4CO2(g) + 2H2O(l)
How many units will gorfin need to sell for profit : If the price is changed, how many units will Gorfin need to sell for profit to remain the same as before the price change?
Preserved while recognizing our commonalities : In our diverse society, how do we honor the traditions and cultures of so many varied groups without inadvertently disadvantaging anyone? How can we develop strategies to ensure that cultural traditions are respected and preserved while recognizing o..
What is the angular acceleration of the grinstone : A grindstone with radius 0.65m starts from rest and rotates counter-clockwise through 3 rev at which point its angular speed is 25 rad/s
The risk-free asset : The risk-free asset?
Determine at what rate is heat transferred : Suppose a lake has a layer of ice 11 cm thick on its surface. The top of the ice layer is cooled by the atmosphere to -5.25° C. At what rate is heat transferred through a 1.5 cm2 area of the ice
At what amunt are cash payments for inventory : Chris's Cookie toppings makes payment on its inventory purchase as follows: 25% in the month of purchase, 65% in the following month, and 10% in the second month following purchase.
The expected return on the market portfolio : Assume that the CAPM holds. Assume also that the expected return on the market portfolio is 10%. If a stock with a beta of 2 has an expected return of 15% in this economy, what is the expected return on a stock with a beta of 0.5?
The truth about spanking : After reading the article, share your understanding of the ethical approaches and viewpoints associated with the highly debated topic of corporal punishment for children. Defend your opinion.

Reviews

Write a Review

Finance Basics Questions & Answers

  Why do dividend investors pay attention to buybacks

Why do dividend investors pay attention to buybacks - The paper should cite approximately eight peer reviewed full text journal articles retrieved from ProQuest, BE & T, InfoTrac, and Academic OneFile.

  One of the greatest advantages of using the pe ratio for

one of the greatest advantages of using the pe ratio for valuation purposes is its simpliciy while one of its greatest

  How much long-term debt does blackwell automotive have

It also had accounts receivable of $141,258 and other current assets of $11,223. How much long-term debt does Blackwell Automotive have?

  Reliable electric is a regulated public utility and it is

reliable electric is a regulated public utility and it is expected to provide steady growth of dividends of 6 per year

  Show the interst payment and principle payment

you are required to make 5 equal annual repayment in the amount of $1285.46 per year, with the first repayment occuring at teh end of the year one. for each year, show the interst payment and principle payment.

  What will net increase or decrease in the annual flotation

What will the net increase or decrease in the annual flotation cost tax savings be if refunding takes place? (a) $6,480 (b) $7,200 (c) $8,000 (d) $8,800 (e) $9,680

  Te bonds mature in 11 years and have 1000 face value

bonds issued by stainless tubs bear an 8 coupon rate payable semiannually. the bonds mature in 11 years and have a

  What impact would newnbspcapitalnbspstructurenbsphave on

seattle health plans currently uses zero-debt financing. its operating income ebit is 1 million and it pays taxes at a

  Is the investment attractive at this rate

Is the investment attractive at this rate? b) Compute the internal rate of return to the nerest 0.01%

  Computing payments

The Peking Duck Company buy from suppliers in a quarter are equal to 60% of the next quarter's forecast sales. The payables deferral period is 60 days.

  What is the amount of the net new borrowing for the current

The income statement for the current year displays an interest paid amount of $8,200. What is the amount of the net new borrowing for the current year?

  How the beta of a portfolio can equal the market beta

Explain how the beta of a portfolio can equal the market beta if 50 percent of the portfolio is invested in a security that has twice the amount of systematic risk as an average risky security.

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