Portfolio containing stock-what is beta of your portfolio

Assignment Help Financial Management
Reference no: EM131898818

You have $300,000 to invest in a portfolio containing Stock X and Stock Y. Your goal is to create a portfolio that has an expected return of 14.5 percent. Stock X has an expected return of 13.28 percent and a beta of 1.44, and Stock Y has an expected return of 9.08 percent and a beta of .84.

a. How much money will you invest in Stock Y? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Investment in Stock Y =

b. What is the beta of your portfolio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Portfolio beta =

Reference no: EM131898818

Questions Cloud

Discuss the concepts of procurement cost : Using the concepts of procurement cost, distribution cost, and monetary weights, explain why resource oriented firms locate at resource sites.
Compute the price of bonds based on semiannual analysis : There are 15 years to maturity. Compute the price of the bonds based on semiannual analysis.
Assume that the expected return on market portfolio : Calculate the cost of common equity. Assume that the expected return on a market portfolio is 15 ?%, the? company's beta is 0.78
What were the final outcomes : Use internet resources to find a situation where company management and the union reached an impasse at some point during their negotiation process.
Portfolio containing stock-what is beta of your portfolio : You have $300,000 to invest in a portfolio containing Stock X and Stock Y. How much money will you invest in Stock Y? What is the beta of your portfolio?
Explain the advantages of using each recruiting process : Use the Internet to research companies that utilize external recruiting processes. Next, based on your research, provide three (3) characteristics of a job.
Examine the flexibility in compensation design : If we use a framework in classifying positions, then how does an organization justify paying a Millennial more over a tenured person (Baby Boomer or not)?
What is annual yield to maturity : The bonds have a $1,500 par value and a coupon rate of 8 percent. If the price of the bond is $1,096.59, what is the annual yield to maturity?
Calculate weighted average cost of capital : The company’s target debt-to-value ratio is 75 percent. Calculate the weighted average cost of capital.

Reviews

Write a Review

Financial Management Questions & Answers

  What is the expected return of portfolio

What is the variance of this portfolio? What is the expected return of the portfolio?

  Consider a financial model with two trading times

Consider a financial model with two trading times {0,1}, a single stock S that pays no dividents, and a bank. At t=0, we can buy or sell any number of shares of the stock at the price S0 = $40 per share. at t=1 the value of one share of stock will be..

  What is the annual financing cost of these bonds

General Automobile Corp. has decided to issue three-year foreign bonds in Japan, denominated in 5,000,000,000 Japanese Yen at par. The bonds have an annual coupon rate of 6.5%, and interest is paid annually. If the Yen is expected to appreciate from ..

  Bond trader purchased each of the bonds

A bond trader purchased each of the following bonds at a yield to maturity of 6%. Immediately after she purchased the bonds, interest rates fell to 5%. What is the percentage change in the price of the following bond after the decline in interest rat..

  About the covariance stock

What can be said about the covariance between Stock A and Stock B? (This question has only 3 possible answer choices – no choice D and no choice E)

  What is your estimate of the stocks current price

What is your estimate of the stock's current price?

  Evaluate risk management techniques

Evaluate risk management techniques from experts in the field. One article by Dr. James Kallman. Dr. Kallman, an expert in the field of risk management

  Accumulate enough money for a down payment

Chin order to accumulate enough money for a down payment on a house, a couple deposits $313 per month into an account paying 3% compounded monthly. If payments are made at the end of each period, how much money will be in the account in 6 years.

  Prestigious investment bank designed a new security

A prestigious investment bank designed a new security that pays a quarterly dividend of $5.00 in perpetuity. The first dividend occurs one quarter from today.

  Calculate all four terms of the dupont identity

Calculate all four terms of the DuPont identity, and present the results but do not analyze them.

  What is required rate of return on preferred stock

What is the required rate of return on a preferred stock with a $50 par value, a stated dividend of 10% of par, and a current market price of (a) $51, (b) $83, (c) $119, and (d) $148 (assume the market is in equilibrium with the required return equal..

  When buying and selling stocks in efficient market

Is stock research and analysis important when buying and selling stocks in an efficient market?

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