The total portfolio is equally as risky as the market

Assignment Help Financial Management

Reference no: EM131079540

You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1.50 and the total portfolio is equally as risky as the market, what must the beta be for the other stock in your portfolio? (Round your answer to 2 decimal places, (e.g., 32.16))

Reference no: EM131079540

Questions Cloud

Components of consumption spending : 1. According to the Keynesian model, what are the two components of consumption spending? What factors determine how consumption changes when real disposable income changes? Explain.

Determine a fourier series expansion of the rectified wave : Determine a Fourier series expansion of the rectified wave.

Payment that represents the repayment of principal : Suppose a firm borrow $5,000, and the loan is to be repaid in 4 equal payments at the end of each of the next 4 years. The bank charges a 10% interest rate on the loan balance that is outstanding at the beginning of each year. The proportion in year ..

Characteristic of monopolistic competition : What is the most important characteristic of monopolistic competition? How do firms behave differently from perfect competitors? What are the implications of having a large number of firms in a monopolistically competitive market?

The total portfolio is equally as risky as the market : You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1.50 and the total portfolio is equally as risky as the market, what must the beta be for the other stock in your portfolio?

Trusts and invested for income : Leonitres bought unit trusts and invested for income. She invested £42,000 in a unit trust with an offer price of £75 per unit, and sold the units after 3 years at the same price. During this period she received income from the units of £9,744. Th..

Describe offline marketing methods that are currently used : Describe the offline marketing methods that are currently used. Describe the proposed online marketing methods and justify each method. Describe how the case study business will integrate marketing methods.

The debt has total current market value : Bouncing Baby Foods' (BBF) balance shed shows a total of $20 million long-term debt with a coupon rate of 8.00 percent. The yield to maturity on this debt is 10.00 percent, and the debt has a total current market value of $17.5 million.

What nominal and effective annual rate of return : Assume that the City of New York sold an issue of $1,000 maturity value, tax exempt (muni), zero coupon bonds 5 years ago. The bonds had a 25-year maturity when they were issued, and the interest rate built into the issue was a nominal 8.40 percent, ..

User Account

All Pages