What is the beta of planned portfolio

Assignment Help Finance Basics
Reference no: EM132703590

You are planning to buy two stocks to create portfolio. One is the very-stable old-world company Proctor & Gamble (PG). Assume PG's beta equals 0.60. The other stock is high-flying new-world company Tesla (TSLA). Assume TSLA's beta equals 1.36. You will invest an equal amount of money in each stock. What is the beta of your planned portfolio? Answer should include two digits to the right of the decimal point, rounded appropriately.

Reference no: EM132703590

Questions Cloud

How is the fixed rate in an fra determined : Why would a corporate engage in a cross-currency swap? In the world of interest rates, what kinds of instruments are available?
What is the formal definition of justice : Dale and Mike Parak were twin brothers and best friends. They spent their entire lives looking out for each other's interests. While growing up, the two were.
Signal of improper revenue recognition : Perpetrators of improper revenue recognition schemes often attempt to offer the defense that recognizing future periods' revenue in the current period is only a
Prepare journal entry that bridgeport should record on dec : The interest rate used by the lessor in setting the payment schedule is 7%, Prepare the journal entries, that Bridgeport should record on December 31, 2020.
What is the beta of planned portfolio : What is the beta of your planned portfolio? Answer should include two digits to the right of the decimal point, rounded appropriately.
What is the bank estimate of the probability : Based on this information, what is the bank's estimate of the probability that XYZ Corp. will default?
Compute Appleton net US tax liability : Appleton paid U.K. income taxes of $500,000 on its branch income. Compute Appleton's net U.S. tax liability and any foreign tax credit carryover for 2018.
Where do most of the world hungry live : Where do most of the world's hungry live, and what are the major causes of hunger? What are some potential consequences and benefits to using biotechnologies.
What is profit at expiration : You then also hedge the position by selling the futures contract at $53. What is your profit at expiration if the stock price goes to $49?

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the expected return of portfolio

(1) What is the beta of this portfolio? (2) What is the expected return of your portfolio if it is fairly priced?

  Principal message of the capital asset pricing model

a. What is the principal message of the Capital Asset Pricing Model (CAPM)? What are its assumptions?

  What is the firm balance of current assets

Asset Management and Profitability Ratios You have the following information on Universe It Ts, Inc.: sales to working capital = 15 times.

  Fidelity is planning a zero coupon bond issue

Fidelity is planning a zero coupon bond issue. The bond has a par value of $2,000, and will mature in 3 years, It will be sold at a price of $750.

  A firm reports that in a certain year it had a net income

a firm reports that in a certain year it had a net income of 4.5 million depreciation expenses of 2.8 million capital

  What are advantages of dividend discount model

What are advantages of Dividend Discount Model? Is it the best dividend model for the current market situation? Why?

  What is the effective cost of the commercial paper

(Estimating the cost of commercial paper) On February 3, 2016, the Burlington Western Company plans a commercial paper issue of $25 million.

  Calculate the net proceeds and the underwriter

Calculate the net proceeds and the underwriter's spread on the stock offering. What percentage of the gross price is the investment bank charging Video

  How much does development office need to ask for up front

Which will contribute $1 million per year, in perpetuity, to the biology department. Assuming an interest rate of 8 percent, how much does the Development Office need to ask for up front?

  What must the expected return on the stock be

A stock has a beta of 1.69, the expected return on the market is 0.08, and the risk-free rate is 0.05. What must the expected return on this stock be?

  What is the most they could pay for a house

If they want to avoid mortgage insurance costs, what is the most they could pay for a house? (Hint: Confirm the maximum drawdown from the HBP in 2019.)

  Discuss the relevance of cost-benefit analysis as a tool

Discuss the relevance of cost-benefit analysis as a tool for capital budgeting decision making. Why is capital budgeting decision making an important process in operations management?

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