User Account

All Pages

Calculate the percentage of share

Assignment Help Finance Basics
Reference no: EM132575101

Michael and Janine are both investors wanting to purchase investment portfolios. The expected return, standard deviation and beta of various investments are shown in the following table:

Apocryphal Industries

17 (Ave return) 14 (SDev) 1.8 (Beta)

Bona Fide Ltd

12 (Ave return) 10 (SDev) 1.0 (Beta)

Market Index

12(Ave return) 2 (SDev) 1(Beta)

10 year Bond

6 (Ave return) 3( SDev) 0(Beta)

Michael wants a portfolio that has an expected return of 10% pa and that contains only Apocryphal Industries and 10 year bonds.

Janine wants a portfolio with a 21% weighting in Apocryphal Industries and a 79% weighting in Bona Fide Ltd shares. The correlation coefficient between the returns of the shares in Apocryphal Industries and Bona Fide Ltd is -0.6.

a) Calculate the percentage of each share that Michael should include in his portfolio to achieve his desired results. Give your answers as a percentage to the nearest percent.

b) Janine is interested in finding out how risky her portfolio is. Calculate the standard deviation of Janine's portfolio. Give your answer as a percentage to 2 decimal places.

Reference no: EM132575101

Questions Cloud

Business development of a takaful berhad : You are the Head of Business Development of a Takaful Berhad in Malaysia. You have been assigned to develop a new product
Reformulate the shareholders equity account : Reformulate the shareholders equity account, if the company pays a 35 percent stock dividend.
What is optimal capital structure of company : Rebecca Isbell Optical Corporation is trying to determine an appropriate capital structure. It knows that, as its financial leverage increases
Calculate the expected return on the shares : Based on this historic data, calculate the expected return on the shares and its standard deviation. Give your answers
Calculate the percentage of share : Michael and Janine are both investors wanting to purchase investment portfolios. The expected return, standard deviation
What is value of company-enoch-arden corporation : Enoch-Arden Corporation has earnings before interest and taxes of $5 million and a 30 percent tax rate. It is able to borrow
What is the future value in year twenty-five : What is the future value in year twenty-five of an ordinary annuity cash flow of? $2,000 per year at an interest rate of? 10.0% per? year?
Reasonable representation of the way-sydney incorporation : Sydney Incorporation one of the favorites of the stock market, was priced at $450 per share. This price was based on an expected dividend
What is the present value of a growing perpetuity : What is the present value of a growing perpetuity that makes a payment of $100 in the first year

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd