What is required rate of return on the investor portfolio

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1. Bettanin Corporation recently issued 20-year bonds. The bonds have a coupon rate of 8 percent and pay interest semiannually. Also, the bonds are callable in 6 years at a call price equal to 115 percent of par value of $1,000. The par value of the bonds is $1,000. If the yield to maturity is 7 percent, what is the yield to call?

2. An investor is forming a portfolio by investing $50,000 in stock A which has a beta of 1.50, and $25,000 in stock B which has a beta of 0.90. The return on the market is equal to 6 percent and Treasury bonds have a yield of 4 percent. What is the required rate of return on the investor's portfolio?

Reference no: EM132005644

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