What is the expected return on a portfolio

Reference no: EM13280894

A stock has a beta of 1.25 and an expected return of 14 percent. A risk-free asset currently earns 2.1 percent.

a. What is the expected return on a portfolio that is equally invested in the two assets

b. If a portfolio of the two assets has a bet of .93, what are the portfolio weights?

c. If a portfolio of the two assets has an expected return of 9 percent, what is its beta?

d. If a portfolio of the two assets has a beta of 2.50, what are the portfolio weights? How do you interpret the weights for the two assets in this case? Explain

Reference no: EM13280894

Questions Cloud

Evaluate the impact of global financial markets on u.s : Imagine one large global financial market. Describe how it would function and the affect it would have on the global economy.

Find an expression for elcetric field and direction of field : A long thin wire with a linear charge density wavelenght/2 runs through the center of the cylinder. Find an expression for the elcetric field and the direction of the field at each of the following location a)r >R

What would the new net income for the company : Assuming a contant price-earnings ratio, what will the effect bo on issuing new equity to finance the investment? To answer, calculate the new book value share, the new total earnings, the new EPS, the new stock price, and the new market-to-book r..

Determine the electric field strength between the plates : The electron gun in an old TV picture tube accelerates electrons between two parallel plates 1.2cm apart with a 28kV potential difference between them. What is the electric field strength between the plates

What is the expected return on a portfolio : A stock has a beta of 1.25 and an expected return of 14 percent. A risk-free asset currently earns 2.1 percent.

Find the minimized sum of products for the function f : Find the minimized SUM OF PRODUCTS for the following f = ( x1 AND (not x2) AND (not x3) ) + ( x1 AND x2 AND x4 ) + ( x1 AND (not x2) AND x3 AND (not x4) )

Difference between rule and act nonconsequentialist theories : Describe the difference between Rule and Act Nonconsequentialist theories of ethics. Provide examples of each and the role they play in society today.

By what factor would its kinetic energy decrease : By what factor would its kinetic energy decrease if the car traveled half as fast

Draw graph of rms value of total current as function of f : Parallel plate capacitor. Plates have area of 2x2cm2 and interplate seperation is 1mm. Insulator inside capacitor has dielectric constant εr=4. Voltage across capactior has 10V amplitude.

User Account

All Pages