What is investment in risk-free asset

Assignment Help Financial Management

Reference no: EM131346236

You want to create a portfolio equally as risky as the market, and you have $1,400,000 to invest. Consider the following information:

Asset Investment Beta

Stock A $280000 0.80

Stock B $350000 1.25

Stock C 1.50

Risk-free asset

Required:

What is the investment in Stock C? (Do not round your intermediate calculations.)

What is the investment in risk-free asset? (Do not round your intermediate calculations.)

Reference no: EM131346236

Questions Cloud

An all-equity firm is considering the projects : An all-equity firm is considering the following projects: Project Beta Expected Return W .70 11% X .95 13 Y 1.05 14 Z 1.60 16 The T-bill rate is 5 percent, and the expected return on the market is 12 percent. Which projects have a higher expected ret..

The cost of debt capital for a firm : The cost of debt capital for a firm

Monthly payments occurring one year from today : You recieve a payment today of $2,000,000, and then monthly payments of $35,000 each for 4 years (48 total monthly payments), with the first of the monthly payments occurring one year from today. If you use a discount rate of 2.28% APR with monthly c..

What is the present value as of today : You recieve a payment today of $2,000,000, and then monthly payments of $35,000 each for 4 years (48 total monthly payments), with the first of the monthly payments occurring one year from today. If you use a discount rate of 2.28% APR with monthly c..

What is investment in risk-free asset : You want to create a portfolio equally as risky as the market, and you have $1,400,000 to invest. What is the investment in risk-free asset? What is the investment in Stock C?

The percentage of sales forecasting method : The percentage of sales forecasting method is used by management to forecast the amount of

Use the net present value method : Universal Electronics is considering the purchase of manufacturing equipment with a 10-year midpoint in its asset depreciation range (ADR). The asset will cost $120,000, and it will produce earnings before depreciation and taxes of $37,000 per year f..

Expansion project-requires initial fixed asset investment : Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.43 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be w..

Use of accounts payable financing : Photochronograph Corporation (PC) manufactures time series photographic equipment. It is currently at its target debt–equity ratio of .62. It’s considering building a new $71.7 million manufacturing facility. A new issue of common stock. If the tax r..

User Account

All Pages