Calculate the beta of the portfolio

Assignment Help Financial Management

Reference no: EM131847838

You have just invested in a portfolio of three stocks. The amount of money that you invested in each stock and its net are summarized below. Calculate the beta of the portfolio and use the capital asset pricing model (CAPM) to compute the expected rate of return for the portfolio. Assume that the expected rate of return on the market is 15% and that the risk-free rate is 7%.

Stock A, Investment = $200,000, Beta=1.50,

Stock B, Investment = $300,000, Beta =0.65,

Stock C, Investment = $500,000, Beta = 1.25,

Reference no: EM131847838

Questions Cloud

Expected capital gains yield and expected overall return : If you bought the stock at $76.22, what is the expected dividend yield, expected capital gains yield and expected overall return?

Shape of the portfolio possibilities curve for two assets : How does the shape of the portfolio possibilities curve for two assets differ when the correlation between them is +1 from when the correlation is 0.25?

What does the investor receive at maturity : A thirty-year bond with coupon of $6000 and a coupon rate of 6% is priced at $105000. What does the investor receive at maturity

What are the NPV and IRR for this project : If the tax rate is 35 percent and cost of capital is 12%, what are the NPV and IRR for this project?

Calculate the beta of the portfolio : Calculate the beta of the portfolio and use the capital asset pricing model (CAPM) to compute the expected rate of return for the portfolio.

Contrast the fiscal health of three major cities : Compare and contrast the fiscal health of three major cities in the U.S. and two other countries in great detail,

Considering investment in mutual fund : You are considering investment in mutual fund with 4% load and expense ratio of 1.3%. Assume annual compounding of returns.

Calculate the incremental rate of return : calculate the incremental rate of return and determine which alternative is better at a MARR of 6% per year over a 20-year study period.

Change in the bond price in dollars and percentage terms : What will be the change in the bond’s price in dollars and percentage terms?

User Account

All Pages