Portfolios should have the most systematic risk

Assignment Help Financial Management
Reference no: EM13943634

Which one of the following portfolios should have the MOST systematic risk?

a. 50% in U.S. treasury bills and 50% in a market index mutual fund.

b. 20% in US treasury bills and 80% invested in a stock with beta =.80

c. 10% invested in a stock with a beta of 1.0 and 90% in a stock with a beta of 1.40

d. 100% invested in a mutual fund which mimics the overall market.

e. 100% in US treasury bills.

Reference no: EM13943634

Questions Cloud

Develop a techno-economic analysis : Waste Wood Biomass and Energy Issues and develop a techno-economic analysis of Thermo chemical processing route for the conversion of wood waste biomass in Nigeria to energy.
Information and communication technology infrastructure : In this Group Project, assume that you and the members of your group are top managers of a big international company spread over several continents. You decide to rebuild/expand your company's Information and Communication Technology infrastructur..
The discount rate and the time increases-the future value : Other things equal, as the discount rate and the time increases, the future value:
Value chain designs and structures : Task Identify two organisations in an industry of your choice. These organisations must have clearly different value chain designs and structures.
Portfolios should have the most systematic risk : Which one of the following portfolios should have the MOST systematic risk?
Find size of monthly payments he will be required to make : Joe secured a loan of $12,000 five years ago from a bank for use toward his college expenses. The bank charges interest at the rate of 4%/year compounded monthly on his loan. Now that he has graduated from college, Joe wishes to repay the loan by amo..
Exchange rate-dollar depreciated : Last week, the USD/ZAR exchange rate was 14.2125. This week, the exchange rate is 14.5447. How much has the South African rand depreciated/appreciated against the U.S. dollar? Last week, the USD/ZAR exchange rate was 14.2125. This week, the exchange ..
Which fits perfectly with your criminal justice degree : Started a career with the Office of Juvenile Justice and Delinquency Prevention, which is a part of the Department of Justice. You are a juvenile justice expert, which fits perfectly with your criminal justice degree
What would her monthly payment be : Oprah Winfrey has closed on a 42-acre estate near Santa Barbara, California, for $49,200,000. If Oprah puts 30% down and finances at 7% for 30 years, what would her monthly payment be? (Do not round intermediate calculations. Round your answer to the..

Reviews

Write a Review

Financial Management Questions & Answers

  Define home mortgage securities

James Fromholtz is considering whether to invest in a newly formed investment fund. The fund's investment objective is to acquire home mortgage securities at what it hopes will be bargain prices

  What is the net present value of the freezer if the required

Joe Meat Corp. is considering replacing its old freezer with a new one that has more capacity. The company estimates that it can sell more meat products with and estimated increase of $15,000. What is the net present value of the freezer if the requi..

  Find the expected return and standard deviation of portfolio

Find the expected return and standard deviation of a portfolio that is invested 80% in Stock A and 20% in Stock B.

  Profitability ratios trading on the equity digital relay

profitability ratios trading on the equity. digital relay has both preferred and common stock outstanding. the

  Which investment should the firm choose if cost of capital

Consider the following projects, X and Y where the firm can only choose one. Project X costs $600 and has cash flows of $400 in each of the next 2 years. Project Y also costs $600, and generates cash flows of $500 and $275 for the next 2 years, respe..

  What interest rate would the investment have to yield

Stanley Roper has $2,300 that he is looking to invest. His brother approached him with an investment opportunity that could give Patrick $4,600 in 4 years. What interest rate would the investment have to yield in order for Stanley’s brother to delive..

  An investment in real estate venture

An investment in a real estate venture will provide after tax cash flows for the next 5 years as follows: year 1, $ 7,500; year 2 $10,000; year 3 $11,000; year 4, $13,500, and year 5, $415,000. An investor would like to earn an annual return of 13%. ..

  Information about rat race home security

Use the following information about Rat Race Home Security, Inc. Based on the data above, what will be the resulting percentage change in earnings per share of Rat Race Home Security, Inc. if they expect operating profit to change -1.5 percent?

  Describes the characteristics of off-balance sheet financing

Leasing is often referred to as off-balance sheet financing of the way that the transaction is treated and reported in financial statements. Which of the following statements best describes the characteristics of off-balance sheet financing?

  Find net benefits to tec of using a wire transfer payment

Determine the net (pretax) benefits to TEC of using a wire transfer payment system if monthly payments from each customer average $25,000 and $50,000.

  Assume debt tax shields have a net value

Digital Organics (DO) has the opportunity to invest $0.98 million now (t = 0) and expects after-tax returns of $580,000 in t = 1 and $680,000 in t = 2. The project will last for two years only. The appropriate cost of capital is 14% with all-equity f..

  About the reducing the dividends

Railway Cabooses just paid its annual dividend of $1.10 per share. The company has been reducing the dividends by 11 percent each year. How much are you willing to pay today to purchase stock in this company if your required rate of return is 15 perc..

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