What is expected return of portfolio

Assignment Help Financial Management
Reference no: EM131905551

Stock J has a beta of 1.38 and an expected return of 14.06 percent, while Stock K has a beta of .93 and an expected return of 11 percent. You want a portfolio with the same risk as the market.

What is the portfolio weight of each stock? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 32.1616.)

Stock J

Stock K

What is the expected return of your portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Expected return of the portfolio             %

Reference no: EM131905551

Questions Cloud

Cost of equity is a market-determined variable in the sense : The cost of equity is a market-determined variable in the sense that it’s shareholders’ required return.
What is standard deviation of portfolio : What is the variance of this portfolio? What is the standard deviation of this portfolio?
Estimates for market as whole in same economic states : Estimates for the market as a whole in the same economic states are -12% in recession, +10% in moderate growth, and +24% in boom.
What would be expected return of portfolio consisting : What would be the expected return of a portfolio consisting of 50% Toyota and 50% Honda?
What is expected return of portfolio : What is the portfolio weight of each stock? What is the expected return of your portfolio?
Calculate the variance of portfolio consisting : Calculate the variance of a portfolio consisting of 50% Toyota and 50% Honda.
What is the variance of the stock : If each economy state has the same probability of occurring, what is the variance of the stock?
What is the standard deviation of orange : The return on shares of the Orange Company are predicted under the following states of nature. What is the standard deviation of Orange?
How many pounds of coffee beans using supply contracts : To hedge its profits from fluctuations in coffee prices, Carlos G.M. should lock in the price of how many pounds of coffee beans using supply contracts?

Reviews

Write a Review

Financial Management Questions & Answers

  Company one bond issue has an after-tax yield

Company David's one bond issue has an after-tax yield of 3.73%. If the firm's WACC is 6.811%, is all the equity common stock, or all retained earnings?

  Estimate the futures price of the index for three month

Estimate the futures price of the index for three-month and six-month contracts. All interest rates and dividend yields are continuously compounded.

  Terms of the income statement and balance sheet collectively

Analyze and compare your two companies in terms of the income statement and balance sheet collectively.

  What is the firm weighted average cost of capital

What is the firm’s weighted average cost of capital (WACC2) if it has to issue new common stock?

  What is the current bond price

If the YTM on these bonds is 5.16 percent, what is the current bond price?

  Penalty on the loan balance

She was charged 1% penalty on the loan balance. How much does she owe including the penalty on November 1, 2002 to pay off the loan?

  What is common-size statement value of the interest expense

A firm has sales of $2,400, net income of $125, total assets of $1,100, and total equity of $750. Interest expense is $200. What is the common-size statement value of the interest expense?

  Explain the different capital budgeting techniques

Calculate the following Time Value of Money problem. explain the different capital budgeting techniques, please discuss the pros and cons.

  What is the projects expected rate of return

If a security plots below the security market line, it is: A project has an assigned beta of 1.24, the risk-free rate is 3.8%, and the market rate of return is 9.2%. What is the project's expected rate of return? A project with higher than average ri..

  What is heusers after-tax cost of debt

The heuser company's currently outstanding bonds have a 10% coupon and a 12% yield to maturity. Heuser believes it could issue new bonds at par that would provide a similar yield to maturity. If its marginal tax rate is 35%, what is heuser's after-ta..

  Used to audit stockholders equity

A substantive strategy is typically used to audit stockholders' equity because

  What is rollins cost of equity when using the capm approach

Rollins Corporation is estimating its WACC. Its target capital structure is 20 percent debt, What is Rollins cost of equity when using the CAPM approach?

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!

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