User Account

All Pages

What are the betas of stocks x and y

Assignment Help Finance Basics
Reference no: EM131100703

You have observed the following returns over time:
Assume that the risk-free rate is 6 percent and the market risk premium is 5 percent.
2086_ff.jpg

a. What are the betas of Stocks X and Y?
b. What are the required rates of return for Stocks X and Y?
c. What is the required rate of return for a portfolio consisting of 80 percent of Stock X and 20 percent of Stock Y?
d. If Stock X's expected return is 22 percent, is Stock X under- or overvalued? 

Reference no: EM131100703

Questions Cloud

Question regarding the social responsibility : Consider the internally and externally focused practices of the organization for which you work or one with which you are familiar. Does the organization focus more on meeting social obligations, engaging in social responsiveness, or acting with s..
Who will insure young drivers : Younger drivers have more of an inelastic demand curve because there are only certain insurance companies who will insure young drivers and most have to have someone else over the age of 18 on their policy with them.
Differences between the coverage in forms of media : Analysis of the similarities and differences between the coverage in forms of media. Include speculations about the reasons for the differences.
Identify a set of arcs that forms a spanning tree : (a) Find a directed path from node A to node F, and then identify three other undirected paths from node A to node F.
What are the betas of stocks x and y : You have observed the following returns over time: Assume that the risk-free rate is 6 percent and the market risk premium is 5 percent. a. What are the betas of Stocks X and Y? b. What are the required rates of return for Stocks X and Y? c. What is ..
Delineate explicitly youngs personality in terms of myers : They believe the reason she manages to be such a good role model of handling volatile situations is that she is confident of her capabilities and sees herself as an effective manager.
Ethical and unethical practices : What are some real-world examples of ethical and unethical practices you have read about, seen in the news, or encountered at your workplace? What were the outcomes of those practices?
Calculate the average rate of return for each stock : Stocks A and B have the following historical returns: a. Calculate the average rate of return for each stock during the 5-year period. b. Assume that someone held a portfolio consisting of 50 percent of Stock A and 50 percent of Stock B. What would h..
Ethical and legal standpoint : If the company markets this FDA-approved drug, how would you describe its actions from an ethical and legal standpoint?

Reviews

Write a Review

Finance Basics Questions & Answers

  Calculate stock price

Corporation Z-prime is like Z in all respects save one: Its growth will stop after year four. In year 5 and afterward, it will pay out all earnings as dividends.

  What level of sales would be the cash break-even level

The manufacturer of a product that has a variable cost of $2.50 per unit and total fixed cost of $125,000 wants to determine the level of output necessary to avoid losses.

  Fundamental imbalance between the fiscal needs

It has often been argued that there is a fundamental imbalance between the fiscal needs of local governments and the main tax instrument (the property tax) available to them to meet those needs.

  Explain roles of limited liability corporations

Write a 700- to 1,050-word paper in which you explain roles of limited liability corporations, limited liability partnerships, and Class C Corporations. If you were establishing your own business, under what circumstances would you choose one inst..

  Issuing additional shares of equity

Assuming there is sufficient cash flow for Tysseland to maintain its target capital structure without issuing additional shares of equity, what is its WACC?

  Would the firms break even point increase or decrease

FIN 534 What is the incremental profit? To get a rough idea of the project's profitability, what is the project's expected rate of return for the next year (defined as the incremental profit divided by the investment)? Should the firm make the invest..

  Estimate the base case cost of each alternative regarding

1. estimate the base case cost of each alternative regarding the provision of ultrasound services. for now ignore the

  Interest is compounded semi-annually

What is its value today if the appropriate interest rate is 8% and interest is compounded semi-annually?

  Bender guitar corporation a manufacturer of custom electric

bender guitar corporation a manufacturer of custom electric guitars is contemplating a 1000000 investment in a new

  Perpetual stream of annual payments

Given an interest rate of 10 percent per year, what is the value at the end of five years of a perpetual stream of 120$ annual payments starting at the end of year 9?

  Compute the implied expected inflation rate

Suppose that a three year Treasury note has no maturity premium, and that the real, risk-free rate of interest is 3%. If the T-note carries a yield to maturity of 13%,

  Role of financial management in a firm

Examine the role of management as it relates to finance in a corporation.  In your post, discuss the role of management by addressing the following prompts:

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd