User Account

All Pages

How to rebalance portfolio

Assignment Help Finance Basics
Reference no: EM133110585

1. A stock paying an annual dividend of $10 indefinitely, the beta of the stock is 0.8, the expected return of the market portfolio is 15% and the risk free rate is 5%. If the actual stock price is $73, what should you do? Calculate and explain.

2. You are bearish on Zoom stock. You decide to short sale 50 shares for 1 year. Zoom's current share price is $100. Calculate your profit if at the end of the year Zoom's stock price goes down to $95 per share, the stock pays a dividend of $6 per share and you paid $3.5 per share in commissions for each transaction.

3. Assume your portfolio's initial asset allocation was 40% to bonds and 60% to stocks. You invested 100,000$. After 3 years, stocks went up by 60% and the bonds by 20%. Calculate and explain how to rebalance your portfolio.

View keyboard shortcuts

4. Assume CAPM holds. The standard deviation of the market portfolio is 50% and the standard deviation of your portfolio is 68%, what will be the proportion of your investment in the risky asset? Explain what they mean.

Reference no: EM133110585

Questions Cloud

Limited number of foreign banks in the philippines : Why do you think it is important to have a limited number of foreign banks in the Philippines? Please create a scenario to justify your answer and explain.
Issuing a qualified report : A news story reports that your employer's auditor is issuing a qualified report because of the use of questionable accounting practices.
Prepare a RACM for a General IT Control : Prepare a RACM for a General IT Control. Be sure the six elements are consistent, i.e. do not mix items from different business processes and objectives
Threat modelling report assessment : Draw a use DFDs - Iterate over processes, data stores, and see where they need to be broken down and Determine the threat types that might impact your system
How to rebalance portfolio : 1. A stock paying an annual dividend of $10 indefinitely, the beta of the stock is 0.8, the expected return of the market portfolio is 15% and the risk free rat
What is net benefit from implementing Preventative Controls : Last year $500,000 worth of inventory was lost to thieves who broke in through windows and doors. What is net benefit from implementing Preventative Controls
Prepare a schedule of expected cash collections for August : The merchandise inventory at June 30 is $25,000. Dividends of $1,700 will be declared and paid in September. Prepare a schedule of expected cash collections
Demonstrate understanding of the importance of symmetry : Demonstrate understanding of the importance of symmetry in molecular structure and spectra and Understand the importance of thermodynamic quantities
Why is it important to complete a round-trip : a) Why is financial leverage understood to be a fair-weather friend?

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