User Account

All Pages

Compute the expected returns for securities

Assignment Help Business Economics
Reference no: EM133077949

Consider the following data for two risk factors (1 and 2) and two securities (J and L): 

rf=0.05

bJ1 =0.80

r1-rf= 0.02

bJ2 =1.40

r2-rf= 0.04

bL1 =1.60

 

bL2 =2.25

a. Compute the expected returns for both securities.

b. Suppose that Security J is currently priced at $22.50 while the price of Security L is $15.00. Further, it is expected that both securities will pay a dividend of $0.75 during the coming year. What is the expected price of each security one year from now?

Reference no: EM133077949

Questions Cloud

Calculate the confidence interval : Much of the recent euro currency crisis that struck Europe was attributed to the economy of Greece. George Papandreou, Greece's prime minister, claimed that cor
Euro currency crisis that struck europe : Much of the recent euro currency crisis that struck Europe was attributed to the economy of Greece. George Papandreou, Greece's prime minister, claimed that cor
Explain the maximum net benefits : Suppose total benefits and total costs are given by B(Y) = 220Y - 15Y2 and C(Y) = 10Y. What level of Y will yield the maximum net benefits?
Tools and instruments of government policy : What are the tools and instruments of Government policy in shaping business environment
Compute the expected returns for securities : Consider the following data for two risk factors (1 and 2) and two securities (J and L):
Express the equilibrium condition in matrix form : Consider the following general equilibrium model with two competitive goods markets. In market 1, demand and supply are equal to QD1 = a-bP1 - eP2 and Qs1 = -f
Pros and cons of running a deficit : How would this tax cut impact the National Budget and the National Debt? What are the pros and cons of running a deficit?
What is the equilibrium price : Assume that the demand curve D(p) given below is the market demand for widgets:
Compute Dakota Division residual income for the year : Assume that the company's minimum desired rate of return on invested capital is 10 percent. Compute Dakota Division's residual income for the year

Reviews

Write a Review

Business Economics Questions & Answers

  Economics assignment

This document contains various important questions and their appropriate answers in the subject field of Economics.

  Demand and supply curves

Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.

  Long-run perfectly competitive equilibrium for the firm

Evaluate Government intervene and correct this situation?(a) Explain the concept of a concentration ratio. A rise in the price of magarine Explain the impact of external costs and external benefits on resource allocation long-run perfectly c..

  Supply and demand diagrams

Explain each of the following using supply and demand diagrams,  With the use of a graph, explain how these two programs affect cigarette consumption and the price of cigarettes.

  Case study: fisher-price toys

The case study of the Fisher-Price Toys, Inc., a popular case in basic economics and management from the prestigious Harvard Business School.

  Draw the production possibility curve

Draw the production possibility curve and a. Define consumer surplus and producer surplus.

  Tax revenue

The Australian government administers two programs that affect the market for cigarettes

  Maximize total welfare

How many tickets to sell to maximize total welfare.

  Difference between the cv and the ev

The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it continues to be the most widely used measure of consumer welfare change. Explain how this can be reconciled

  Depict von neumann-morgenstern utility index u in a diagram

Depict the von Neumann-Morgenstern utility index u in a diagram

  What is the market solution

What is the market solution (market price and quantity) and What is the total surplus of the society under the market solution

  Calculate gross national product and net national product

Calculate gross national product and net national product

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