User Account

All Pages

Determine the equation for the security market line

Assignment Help Accounting Basics
Reference no: EM132099671

Question - The investment portfolio of Mapeni Limited consists of shares in five companies operating in different industries.

Company

Amount Invested (Sh. million)

Stock beta Coefficient

A Ltd.

B Ltd.

C Ltd.

D Ltd.

E Ltd.

160

120

80

80

60

0.5

2.0

4.0

1.0

3.0

The risk free rate (Rf) is 8%. The market returns have the following probability distribution for the next period.

Market return %

Probability

10

12

13

16

17

0.1

0.2

0.4

0.2

0.1

Required:

Compute the expected return from the market (Rm).

Calculate the beta coefficient for the portfolio (βp).

Determine the equation for the security market line.

Reference no: EM132099671

Questions Cloud

What challenges exist to this policy-making process : How you would implement a training program for all of the employees related to the revised sexual harassment policy?
Calculate the velocity a spherical rain drop : Calculate the velocity a spherical rain drop would achieve falling (taking downward as positive) from 5.4 km in the following situations. h = 5.4 km l = 4.2mm.
What is human centered design thinking : What is Human Centered Design Thinking and how does it differ from the traditional way organizations innovate?
Organic structures are better than mechanistic structures : Organic structures are better than mechanistic structures for. Higher levels of formalization in organizational structures tend to.
Determine the equation for the security market line : The risk free rate is 8%. The market returns have the following probability distribution for the next period. Determine the equation for security markrt line
What is the wheel angular velocity : A bicycle wheel is rotating at 42rpm when the cyclist begins to pedal harder, giving the wheel a constant angular acceleration of 0.46 rad/s2.
What is the acceleration of the bar : A 2.60-N metal bar, 1.50 m long and having a resistance of 10.0 ohms, rests horizontally on conducting wires connecting it to the circuit shown in the figure.
Define group cohesiveness : Define group cohesiveness. Explain why high group cohesiveness could result in decrease in productivity. Give examples along with your explanations.
Identify and explain the importance of each event : List fifteen (15) significant Cold War events, that you choose, since 1945. In a few sentences, identify and explain the importance of each event.

Reviews

Write a Review

Accounting Basics Questions & Answers

  Calculate the predetermined overhead rate for horvath

Horvath uses normal costing and applies overhead on the basis of direct labor hours. Calculate the predetermined overhead rate for Horvath

  Given the following information for the share pei boutique

Given the following information for the Share-Pei Boutique Corporation, calculate the NPV of a New Machine and whether the investment should be made: cost = $7,500;

  Distrust disrespect and animosity pertain to which

distrust disrespect and animosity pertain to which component of indirect costs associated with mismanaged

  Prepare a cost comparison for replacing the old equipment

geiger company is considering the replacement of equipment used in operations. the following data are available old

  Determine the monthly break-even

Madlem, Inc. produces and sells a single product whose selling price is $280.00 per unit. Determine the monthly break-even in either unit or total dollar sales.

  Daisy mae yockum is very proud of the garden she has

daisy mae yockum is very proud of the garden she has created behind her home in landfill wv. she and her family consume

  What is its sustainable growth rate

It has a total debt of $48,000 and total equity of $60,000. Last year, it paid dividends of $6,000. What is its sustainable growth rate (SGR)

  Wilgers company has budgeted sales volume of 30000 units

wilgers company has budgeted sales volume of 30000 units and budgeted production of 27000 units while 5000 units are in

  Company''s ability to break even

We've all experienced (or heard about) the challenges that the airlines have been facing. Read the Zacks Investment Research article, "Airline Industry Stock Outlook - August 2012." Identify three factors that are affecting airline company's abili..

  What is the significance of different dols using the example

What is the significance of different DOLs using this example? What does the return on equity (ROE) ratio tell management? How is it used in the decision-making process?

  Prepare summary journal entries to record the months sales

selected balance sheet information for the wolf company at november 30 and december 31 2013 is presented below. the

  If the notes provides for interest compounded semiannually

on june 30 2008 raminc. borrowed 25000 from good bank. in connection with the transaction ram executed an 8 two-year

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