Risk-free rate of return

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1: In order to fund her retirement, Michele requires a portfolio with an expected return of 0.11 per year over the next 30 years. She has decided to invest in Stocks 1, 2, and 3, with 25 percent in Stock 1, 50 percent in Stock 2, and 25 percent in Stock 3. If Stocks 1 and 2 have expected returns of 0.11 and 0.11 per year, respectively, then what is the minimum expected annual return for Stock 3 that will enable Michele to achieve her investment requirement?

2: Lee purchased a stock one year ago for $25. The stock is now worth $33, and the total return to Lee for owning the stock was 0.36. What is the dollar amount of dividends that he received for owning the stock during the year?

3: The beta of M Simon Inc., stock is 1.5, whereas the risk-free rate of return is 0.10. If the expected return on the market is 0.16, then what is the expected return on M Simon Inc?

4: London purchased a piece of real estate last year for $84,900. The real estate is now worth $103,500. If London needs to have a total return of 0.21 during the year, then what is the dollar amount of income that she needed to have to reach her objective?

5:The risk-free rate of return is currently 0.05, whereas the market risk premium is 0.05. If the beta of RKP, Inc., stock is 1.9, then what is the expected return on RKP?

Reference no: EM131266761

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