Reference no: EM132567444

Questions -

Q1. Richard purchased a piece of land last year for $85,700. The land is now worth $103,800. If Richard needs to have a total return of 0.20 during the year, then what is the dollar amount of income that he needed to have to reach his objective? Round to two decimal places.

Q2. In order to fund his retirement, John requires a portfolio with an expected return of 0.10 per year over the next 30 years. He 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 0.08 and 0.11 per year, respectively, then what is the minimum expected annual return for Stock 3 that will enable John to achieve his investment requirement? Round to two decimal places.

Q3. The beta of Z Alien Inc., stock is 1.7, whereas the risk-free rate of return is 0.08. If the expected return on the market is 0.13, then what is the expected return on Z Alien Inc? Round to four decimal places.