Find new equilibrium expected return on sarah portfolio

Assignment Help Biology
Reference no: EM132645113

Sarah owns a portfolio of stocks that have a market value of Rs. 50,000, and an estimated CAPM beta of 0.90.

(a) If the market risk premium is 9%, and the risk-free rate is 6%, what is the expected equilibrium return on this portfolio?

(b) If Sarah decides to sell one of her holdings that has a market value of Rs. 10,000 and a beta of 0.75, and invest the proceeds in another stock having a beta of 1.3, what is the new equilibrium expected return on her portfolio?

Reference no: EM132645113

Questions Cloud

What is the minimum annual premium : Assume r=.02 (annual compounding), and that one year probabilities of death at age 70, 71 and 72 are 0.024, 0.026, 0.028. What is the minimum annual premium?
What is the risk of calls versus shares : You are bullish on Amazon and want to compare 3-month strategies of buying stock to buying call options.
Compute what is the value of the abandonment option : If the property is purchased, the company's plan is to spend another $5m today. What is the value of the abandonment option?
Calculate the costs derived from daily maintenance : We are a graphic arts company, and at the beginning of 2016, we acquired a new printer. Calculate the costs derived from daily maintenance
Find new equilibrium expected return on sarah portfolio : Sarah owns a portfolio of stocks that have a market value of Rs. 50,000, and an estimated CAPM beta of 0.90.
What is the projects expected npv : What is the projects expected NPV? The tourism sector has been lobbying vigorously against the tax, and projections are that there is a 70% probability
How does highlight shortcomings of traditional npv analysis : While the company does not have the option to delay construction, How does highlight shortcomings of traditional NPV analysis?
What are the limitations of the apr : How does the APR relate to the effective cost of borrowing (ECB)? What are the limitations of the APR?
Explain a crisis from your local law enforcement agency : Identify and explain a crisis from your local law enforcement agency. From the information in Chapter 2 explain which of the six broader trends apply.

Reviews

Write a Review

Biology Questions & Answers

  Immune response to infectious disease

It is a very curcial concept to understand how the immune response is mounted against viruses, bacteria, protozoans and helminthes. For an effective immune response, both innate and adaptive immunity should work together.

  A review on advanced glycated end products (ages)

This Project report elaborates a critical review of important elements attached to Advanced Glycated End Products (AGEs). It is very crucial to understand the process called Millard reaction.

  Plastic as a soil stabilizer

Soil stabilization is the permanent physical and chemical alteration of soils to enhance their physical properties. Stabilization can increase the shear strength of a soil and control the shrink-swell properties.

  Principles of microbiology

This assignment has three parts which contains questions related to Microbiology. It contains basic principles of microscopy, staining techniques in microbiology and microbial growth in the food industry.

  List the biologic functions

Lipid metabolites are often seen as key elements in cellular signaling. Is this unique? Please provide several examples of the function of lipids as key elements in signal arrays and list the biologic functions these signals affect?

  Biologic function relationships

Please describe how one might search for chemical structure, biologic function relationships, involving small molecular weight lipophylic compounds. Provide one example.

  Case study on patient in the haematology laboratory

Write a case study which detailing a scenario of a patient being investigated in the Haematology laboratory.

  Use of pcr and genetic approaches in biotechnology

The use of PCR and genetic approaches in biotechnology

  Describe the role of this enzyme in honey

Glucose oxidase is an enzyme that can be used for measurements of glucose levels by combining this reaction with an oxygen probe.

  Genetic problems

What phenotypic ratio would you get if you crossed a white mouse and a heterozygous brown mouse?

  Prepare an essay on nosocomial infection

Prepare an essay on nosocomial infection.

  Monitoring and recording the blood pressure

To increase the awareness of monitoring and recording the blood pressure of patients and practice measuring blood pressure in a safe environment.

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!

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