What will be expected return and beta of your portfolio

Assignment Help Financial Management
Reference no: EM13911061

You are an investor in common stocks, and you currently hold a well-diversified portfolio that has an expected return of 8.5%, a beta of 1.15, and a total value of $99,000. You plan to increase your portfolio by buying 100 shares of Grand Co. at $110 a share. Grand has an expected return of 10% with a beta of 1.65. What will be the expected return and the beta of your portfolio after you purchase the new stock?

Reference no: EM13911061

Questions Cloud

What are some strategies used to retarget : What is retargeting? What are some strategies used to retarget Web site visitors?
What is the operating cash flow for the project : You are evaluating a project for The Tiff-any golf club, guaranteed to correct that nasty slice. You estimate the sales price of The Tiff-any to be $440 per unit and sales volume to be 1,000 units in year 1; 1,500 units in year 2; What is the operati..
Concerning the return on stock-compute your expected return : Given the following probability distribution describing your expectations concerning the return on this stock, compute your expected return?
Why are many manufacturers and retailers out sourcing : Why are many manufacturers and retailers out sourcing the physical logistics of delivering merchandise to shoppers? What advantages does such a strategy offer? What are the potential issues or disadvantages?
What will be expected return and beta of your portfolio : You are an investor in common stocks, and you currently hold a well-diversified portfolio that has an expected return of 8.5%, a beta of 1.15, and a total value of $99,000. You plan to increase your portfolio by buying 100 shares of Grand Co. at $110..
What is that characteristic-present value of monetary sum : The examples in the text show a unique characteristic (think: positive or negative sign) associated with how the PRESENT VALUE (PV) of a monetary sum (when given) should be expressed when you are solving for future value (FV) of that sum. What is tha..
Briefly discuss three models for selling mobile : Briefly discuss three models for selling mobile ad impressions. What are the primary measures for the success of mobile advertising?
Assume that arctic cat produces a batch : Assume that Arctic Cat produces a batch of 1,000 snowmobile helmets.
What is the percentage change in the price of your bond : You own a bond with duration of 4.5 and a convexity of 77. If interest rates decrease by 50 basis points, what is the percentage change in the price of your bond?

Reviews

Write a Review

Financial Management Questions & Answers

  What is the projected dividend for the coming year

Frey Corp. is experiencing rapid growth. Dividends are expected to grow at 26 percent per year during the next three years, 16 percent over the following year, and then 4 percent per year indefinitely. The required return on this stock is 10 percent,..

  The discussion board db is part of the core of online

the discussion board db is part of the core of online learning. classroom discussion in an online environment requires

  What is the current price of a bond

What is the current price of a bond if it is priced to yield 2 percent, has a $1,000 face value, has 10 years to maturity, pays semiannual coupon payments, and has a coupon rate of 7 percent?

  Forward price and the initial value of the forward contract

A one-year long forward contract on a non-dividend-paying stock is entered into when the stock price is $40 $38 and the risk-free rate of interest is; 8% per annum with continuous compounding. What are the forward price and the initial value of the f..

  Next payment and payment at maturity

You purchase 2,500 bonds with a par value of $1,000 for $985 each. The bonds have a coupon rate of 7.7 percent paid semi-annually, and mature in 10 years. How much will you receive on the next coupon date?

  Calculating perpetuity values

The Maybe Pay Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $20,000 per year forever. Suppose a sales associate told you the policy costs $465,000. At what interest rate would this be a fair deal?

  What is the percentage change in the price of bond

Both Bond Sam and Bond Dave have 6 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has four years to maturity, whereas Bond Dave has 19 years to maturity. If interest rates suddenly rise by 2 percent, what is the perc..

  These should be included in the cash flow at time zero

All of the following are related to a proposed project. Which of these should be included in the cash flow at time zero? I. purchase of $1,400 of parts inventory needed to support the project II.

  What would financial analyst be most justified in concluding

A firm's current ratio has steadily increased from 2009 to 2014, from 1.3 in 2011 to 3.9 in 2014. What would a financial analyst be most justified in concluding?

  Ross creek ltd

On 3 August 2011 Ross Creek Ltd declared and paid a dividend of $10000 from profits earned prior to its acquisition by Sebastopol Ltd. The directors consider that the value of the investment in Ross Creek Ltd has been impaired and have adjusted the p..

  What is the bonds nominal yield to maturity

One year ago Clark Company issued a 10-year, 13% semiannual coupon bond at its par value of $1,000. Currently, the bond can be called in 6 years at a price of $1,065, and it now sells for $1,270. What is the bond's nominal yield to maturity?

  What is the expected market price per share

You are thinking about buying a share of Glencoe Industries, which has a current market price of $30.00 per share. Glencoe expects to pay a dividend of $1.125 per share next year. Your required rate of return on these types of investments s 6% and is..

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