Calculate market risk premium and shareholder expect

Assignment Help Corporate Finance

Reference no: EM1347474

3. An investor has a stock portfolio. Each stock (listed below) in the portfolio has the following market values and betas.

Stock Market Value Beta
Coca-Cola $8,085 0.89
Cisco Systems $1,900 1.1
AT&T $12,900 0.60
Northrop Grumman $6,000 1.2

What can an investor expect from this portfolio?
a. This portfolio will have higher levels of volatility than the market.
b. The portfolio's unsystematic risk is measured through beta which is 0.84.
c. This portfolio has less systematic risk than the market.
d. This portfolio has less money invested in low beta stocks and more money invested in high beta stocks.

4. A stock has the same level of systematic risk as the market. The stock has an expected return of 14%. The risk free rate is 5%. Calculate the market risk premium.
a. 5%
b. 7%
c. 9%
d. 14%

5. The stocks of Microsoft and Apple have a correlation of 0.6. Microsoft and Apple stock have variances of 30% and 40%. What is their covariance?

a. 0.21
b. 0.07
c. 0.72
d. 0.36

Reference no: EM1347474

Questions Cloud

Vpn access for employees to remotely access : Explain best option for VPN access for employees to remotely access the Ocper, Inc. network and describe your reasoning.

Collegepak company-cost volume profit analysis : CollegePak Company produced and sold 60,000 units throughout the year just ended at an average price of $20 per unit. Variable manufacturing costs were $8 per unit, and variable marketing costs were $4 per unit sold.

United states v wrw corporation : United States v WRW Corporation - prepare an analysis of the case Can there be a case analysis provided for the case below

Compute the resulting dead weight loss : Compute the resulting dead weight loss (DWL) inefficiency from the monopolistic optimal outcome.

Calculate market risk premium and shareholder expect : A share holder has a stock portfolio. Every stock in the portfolio has following market values and betas. So determine the Shareholder expect from this portfolio .

Values for the items in the risk register : Recommend reasonable values for items in risk register for this asset and threat, and give justifications for your choices.

What is the magnitude of the centripetal acceleration : A stone is dropped at t = 0. A second stone, with 2 times the mass of the first, is dropped from same point at t = 190 ms. (a) How far below the release point is the center of mass of two stones at t = 390 ms? (Neither stone has yet reached the gr..

Theories to motivate employee groups : what would be some discussion points for each? If I am wrong in my selections, what motivation theory would apply to each employee group?

Describe relative speed of lans used at each location : Describe how relative speed of 100BaseT LANs used at each location compares to accessing WAN link between two sites.

User Account

All Pages