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Evaluating risk and return stock x has 10% expected return , a beta coefficient of .9, and 35% standard deviation from expected returns. stock y has 12.5% expected return and a beta coefficient of 1.2, and a 25% standard deviation.the risk free rate is 6% and the market risk premium is 5%. a) each stocks coefficient of variation b)which stock is riskier for a diversified investor and why? c) each stocks required rate of return d) on the basis of the two stocks expected and required returns, which stock would be more attrative to a diversified investor? e)calculatet the required return of a portfolio that has $7500 invested in stock x and $2500 invested in stock y. f) if the market risk premium increased to 6% which of the two stocks would have the larger increase in required return?
At a 9.5% discount rate, what is the difference in the present value of these two sets of payments?
The stock of Bruin, Inc., has an expected return of 22 percent and a standard deviation of 35 percent. The stock of Wildcat Co. has an expected return of 14 percent and a standard deviation of 40 percent. The correlation between the two stocks is .40..
Consider an five-year, 12 percent annual coupon bond with a face value of $1,000. The bond is trading at a rate of 9 percent. What is the price of the bond? If the rate of interest increases 1 percent, what will be the bond’s new price?
Ultra Petroleum (UPL) has earnings per share of $1.57 and a P/E ratio of 32.96. What’s the stock price?
Which of the following does not constitue a property tax relief measure?
Suppose you are going to receive $13,500 per year for six years. The appropriate interest rate is 8.4 percent. What is the present value of the payments if they are in the form of an ordinary annuity? What is the present value if the payments are an ..
What are the current market values of Dietrich's equity and debt?
Explain the price adjustment strategy evident in the supermarket's reasoning?
Nodebt Inc. is a firm with all-equity financing. Its equity beta is .80. What is Nodebt’s asset beta? What is Nodebt’s WACC?
The appropriate discount rate for the following cash flows is 9 percent compounded quarterly. What is the present value of the cash flows?
What is the firm's horizon, or continuing, value? What is the firm's intrinsic value today, P0?
How much money do you expect to have at the end of your investment horizon if you invest in the mutual fund?
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