What is portfolio beta

Assignment Help Financial Management
Reference no: EM131352313

You own a stock portfolio invested 30 percent in Stock Q, 35 percent in Stock R, 10 percent in Stock S, and 25 percent in Stock T. The betas for these four stocks are 1.4, .7, 1.5, and .8, respectively. What is the portfolio beta? Round your answer to 3 decimal places

Reference no: EM131352313

Questions Cloud

What is the levered internal rate of return : You are considering the acquisition of a small office building. The purchase price is $775,000. Seventy-five percent of the purchase price can be borrowed with a 30-year, fully amortized mortgage with a 7.5% interest rate. Payments will be made annua..
Portfolio beta-what is the beta of your portfolio : Portfolio Beta: You own $31,000 of City Steel stock that has a beta of 3.41. You also own $43,000 of Rent-N-Co (beta = 1.86) and $21,600 of Lincoln Corporation (beta = -.74). What is the beta of your portfolio?
Bond valuation-outstanding bonds : Nungesser Corporation's outstanding bonds have a $1,000 par value, a 12% semiannual coupon, 8 years to maturity, and an 8.5% YTM. What is the bond's price?
Market valuation is combination of discounted cash flow : Explain why DCF analysis as commonly used in a market valuation is a combination of discounted cash flow and direct capitalization methods. Does a zero NPV imply that the investor’s expected yield is equal to zero? Explain why or why not.
What is portfolio beta : You own a stock portfolio invested 30 percent in Stock Q, 35 percent in Stock R, 10 percent in Stock S, and 25 percent in Stock T. The betas for these four stocks are 1.4, .7, 1.5, and .8, respectively. What is the portfolio beta?
The required return in nominal terms : Machine A requires an initial investment of $ 5,000, has a 10 year life expectancy, and is expected to reduce the company's operating costs by $ 1,200. annually in "real terms". This machine would have no sales value at the end of its useful life. Th..
What is mary effective annual rate : Mary purchased 100 shares of Sweet Pea Co. stock at a price of $48.66 six months ago. She sold all stocks today for $46.11. During that period the stock paid dividends of $1.45 per share. What is Mary’s effective annual rate?
Assume the lottery can invest at the given interest rates : Find the cash value of the lottery jackpots given below. Yearly jackpot payments begin immediately. Assume the lottery can invest at the given interest rates.
Find the present value of the sales of diet food : Two months ago management hired a consulting firm to conduct a market survey. This study cost $ 6,000. And noted that the market for dog food would allow us to sell 2,500,000 units annually for the next eight years. As a result of selling the new pro..

Reviews

Write a Review

Financial Management Questions & Answers

  Calculation of g and eps

Spencer Supplies's stock is currently selling for $60 per share. The firm is expected to earn $5.40 per share this year and to pay a year-end dividend of $2.20. If investors require a 9% return, what rate of growth must be expected for Spencer?

  Determine the effective rate of interest

Suppose that John Doe wants to borrow $250,000 to buy a home but has a poor credit history. A bank seeking to earn a risk-free return on its loan requires the return equal to 3%. How would you structure the loan for John? Suppose that the loan is und..

  Calculate and interpret the two revenue variances

Consider the following 2012 data for Newark General Hospital (in millions of dollars): Calculate and interpret the two profit variances. Calculate and interpret the two revenue variances. Calculate and interpret the two cost variances.

  The returns from an asset are normally distributed

Assume that the returns from an asset are normally distributed. The average annual return for this asset over a specific period was 17.1 percent and the standard deviation of those returns in this period was 43.8 percent.

  According to constant growth dividend model

The Black Bear Company just paid an annual dividend of $5.98. If you expect a constant growth rate of 8% percent, and have a required rate of return of 12.65 percent, what is the current stock price according to the constant growth dividend model (Go..

  What is the value of one right

Frank Enterprises is sponsoring a rights offering wherein every shareholder will receive one right for every share of stock they own. The new shares in this offering are priced at $25 plus 5 rights. The current market price of Frank Enterprises stock..

  Project be accepted on average accounting rate of return

An investment has an initial cost of $3.3 million. This investment will be depreciated by $900,000 a year over the three-year life of the project. Should this project be accepted based on the average accounting rate of return if the required rate is ..

  Example of a global strategy

A country barters the surplus coffee beans it grows for other agricultural products grown in a neighboring country. There is no exchange of currency between these countries. The type of business arrangement between the two countries can be regarded a..

  What annual deposit must robert make if the fund

Robert Hitchcock is 39 years old today and he wishes to accumulate $561,500 by his 60th birthday so he can retire to his summer place on Lake Hopatcong. He wishes to accumulate this amount by making equal deposits on his 39th through his 59th birthda..

  Some risk can be mitigated by diversifying

We are learning that some risk can be mitigated by diversifying. In a portfolio of stocks, we simply buy stocks from lots of companies in different industries. What about poor Kelly. What can she do to avoid be crippled by some of the unsystematic ri..

  Long term bonds-common stock convertible debentures

Golden Gate Aircraft is a medium-sized aircraft company located just outside San Francisco whose sales distribution is approximately 30 percent for defense contracts and 70 percent for nonmilitary uses. To raise addition fund, which one should be use..

  What is the current yield on the bonds

Bourdon Software has 10.2 percent coupon bonds on the market with 20 years to maturity. The bonds make semi annual payments and currently sell for 107.9 percent of par. What is the current yield on the bonds? What is the YTM? What is the effective an..

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