Risk-free asset-how much will you invest in stock

Assignment Help Financial Management

Reference no: EM13919400

You have $100,000 to invest in Stock D, Stock F, or a risk-free asset. You must invest all your money. Your goal is to create a portfolio that has an expected return of 11.4 percent. Assume D has an expected return of 14.9 percent, F has an expected return of 10.8 percent, and the risk-free rate is 5.95 percent. Required: If you invest $50,000 in Stock D, how much will you invest in Stock F?

Reference no: EM13919400

Questions Cloud

Merger bid-merger valuation with change in capital structure : Hastings estimates that if it acquires Vandell, interest payments will be $1,500,000 per year for 3 years after which the current target capital structure of 30% debt will be maintained. What is the unlevered value of Vandell? Vandell's beta is 1.10...

What is the probability that the sample mean scores : A typical adult has an average IQ score of 105 with a standard deviation of 20. If 20 randomly selected adults are given an IQ test, what is the probability that the sample mean scores will be between 85 and 125 points?

Develop a linear program that phototech can use : Develop a linear program that PhotoTech can use to determine how many units of each battery pack to produce at each plant in order to minimize the total production and shipping cost associated with the new contract.

Legal curfews or restricted driving privileges : 1. Should people under 18 be subjected to legal curfews or restricted driving privileges?

Risk-free asset-how much will you invest in stock : You have $100,000 to invest in Stock D, Stock F, or a risk-free asset. You must invest all your money. Your goal is to create a portfolio that has an expected return of 11.4 percent. Assume D has an expected return of 14.9 percent, F has an expected ..

What was the arithmetic average annual return : Consider the following information on large-company stocks for a period of years. Series Arithmetic Mean Large-company stocks 13.1 % Small-company stocks 16.4 Long-term corporate bonds 6.2 Long-term government bonds 6.1 Intermediate-term government b..

Free market systems versus a command economy : s there a difference between the free market systems versus a command economy. In your own words explain the characteristics that underline both theses' systems. Provide a country example for each system.

What is the companys cost of common equity : Koshun Company just paid a dividend of $0.90. The company's common stock currently sells at a price of $30.00 and its dividend grows at a constant rate of 7.00%. What is the company's cost of common equity (RE)?

Equity transactions affect components of stockholders equity : Briefly explain (3–5 paragraphs) how equity transactions affect the components of stockholders’ equity. For instance, what impact do these transactions have on financial ratios, such as EPS (earnings per share)?

User Account

All Pages