What is the minimum expected annual return for stock

Assignment Help Finance Basics
Reference no: EM13298758

In order to fund her retirement, Glenda requires a portfolio with an expected return of 12 percent 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 9 percent and 10 percent per year, respectively, then what is the minimum expected annual return for Stock 3 that will enable Glenda to achieve her investment requirement?

Reference no: EM13298758

Questions Cloud

Calculkate how far should the mirror be from the wall : A luminous object is 3.60m from a wall. You are to use a concave mirror to project an image of the object on the wall, How far should the mirror be from the wall
What is the cubic feet of gas storage space in fault block : After injecting 50 MMSCF (14.7 psia and 60 oF), the pressure increase from 2500 to 3500 psia. Deviation factors for the gas are 0.90 at 3500 and 0.80 at 2500 psia and the bottom-hole temperature is 160 oF. What is the cubic feet of gas storage spa..
What does it mean to be human-how do you define personhood : What does it mean to be human? How do you define personhood? How does one's understanding of what it means to be human influence ethical and moral decisions in nursing and health care?
What is the present value of a monthly payment : If you were to save $5000 every year for the next ten years, and you could invest at a rate of 12% on average, what would be the total value of your investment in 10 years?
What is the minimum expected annual return for stock : If Stocks 1 and 2 have expected returns of 9 percent and 10 percent per year, respectively, then what is the minimum expected annual return for Stock 3 that will enable Glenda to achieve her investment requirement?
Why is wood more common in residential construction in us : why is wood more common in residential construction in the US and concrete more common in commercial construction
What is the frequency for given channel : TV-reception antennas for VHF (channels 2 through 13) are constructed with cross wires supported at their centers, What is the frequency for channel 4
What is your expected starting salary : Without considering the additional educational years or the time value of money, what is your expected starting salary as well as the standard deviation of that starting salary?
Find the apogee distance : An Earth satellite has a speed of 28100 km/hr when it is at its perigee, 281 km above Earth's surface. Find the apogee distance

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the pretax cost of debt

jiminy's Cricket Farm issued a 30-year, 7.6 percent semiannual bond 6 years ago. The bond currently sells for 92.5 percent of its face value. The company's tax rate is 38 percent. What is the pretax cost of debt?

  What is the average accounting rate of return

This equipment will be depreciated on a straight-line basis to a zero book value its eight-year life. The equipment is expected to generate net income of $36,000 a year for the first four years and $22,000 a year for the last four years. What is t..

  Compute the firm price-earnings ratio

Reagan Corp. has reported a net income of $805,700 for the year. The company's share price is $13.19, and the company has 318,290 shares outstanding. Compute the firm's price-earnings ratio.

  What is the sensitivity of ocf to changes in the variable

What is the sensitivity of OCF to changes in the variable cost figure? Calculate the change in OCF if there is a $1 decrease in estimated variable costs.

  How large will your retirement account be in 35 years

how large will your retirement account be in 35 years? (Do not round intermediate calculations and round your final answer to 2 decimal places.

  Foreign exchange and currency

Illustrate the foreign exchange rate between two currencies. Describe its effect on business transactions conducted in a foreign currency.

  How much is net working capital

How much is net working capital

  What is the expected return on the market

The stock of Big Joe's has a beta of 1.66 and an expected return of 13.40 percent. The risk-free rate of return is 5.9 percent. What is the expected return on the market?

  Finance capital structure decision and cost of capital

Upon reviewing total debt/equity ratios, company betas, profitability ratios, company revenue, assets, and liabilities, and the nature of the operations of the companies including the nature of their customers and products.

  What are the portfolio weights for a portfolio

What are the portfolio weights for a portfolio that has 165 shares of Stock A that sell for $90 per share and 140 shares of Stock B that sell for $106 per share? (Round your answers to 4 decimal places (e.g., 32.1616).)

  Computation of value of perpetuity and annuity

Computation of value of perpetuity and annuity and which alternative should you choose ignoring tax consequences

  World united stock currently plots on security market line

World United stock currently plots on the security market line and has a beta of 1.04. Which one of the following will increase that stocks rate of return without affecting the risk level of the stock, all else constant.

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