Find beta of the new portfolio

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Reference no: EM1370418

Suppose that you will receive $2000 a year in years 1 thru 5, $3000 a year in years 6 thru 8, and $4000 in year 9 with all cash flows to be received at the end of the year. If you require a 14 percent rate of return what is the present value of these cash flows?

You hold a diversified portfolio consisting of a $10,000 investment in each of 20 different common stocks (your total investment is $200,000). The portfolio beta is equal to 1.2. You have decisded to sell one of your stocks which has a beta of 0.7 for $10,000. You plan to use the proceeds to buy another stock with a beta of 1.4. What will the beta be of the new portfolio?

You have just taken out an installment loan for $100,000. Assume that the loan will be repaid in 12 equal monthly installments of $9,456 and the first monthly payment will be due one month from today. How much of the third monthly payment will go toward repayment of principal?

Reference no: EM1370418

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