What is the beta of portfolio

Assignment Help Financial Management
Reference no: EM132020340

1. You are going to withdraw $1,000 at the end of each year for the next three years from an account that pays interest at a rate of 9% compounded annually. The account balance will reduce to zero when the last withdrawal is made. How much money will be in the account immediately after the second withdrawal is made?

a. $1,000.00

b. $917.43

c. $2,000.00

d. $982.29

e. $925.93

2. Consider a portfolio made up of two risky assets and a risk-free asset. You invest 20% in asset A with a beta of 1.25 and 40% in asset B with a beta of 1.1. What is the beta of the portfolio?

a. 0.69

b. 0.94

c. 1.03

d. 1.12

e. 1.20

Reference no: EM132020340

Questions Cloud

What is the net advantage to leasing : The corporate tax rate is 34% and the cars belong in CCA class 10 (a 30% class), what is the net advantage to leasing?
This lease is most likely an operating lease : According to the lease agreement, XYZ will pay property taxes and insurance on the equipment. This lease is most likely an operating lease.
What would total recruiting cost be for chester next year : The goal of this additional investment is to improve the quality of applicants. What would the total recruiting cost be for Chester next year?
What is the payback period of project : A project costs $450 and has cash flows of $110 for first three years and $75 in each of project's last five years. What is the payback period of project?
What is the beta of portfolio : You invest 20% in asset A with a beta of 1.25 and 40% in asset B with a beta of 1.1. What is the beta of the portfolio?
Weighted average cost of capital for audio shop : The company's tax rate is 34 percent. What is the weighted average cost of capital for Al's Audio Shop?
Determine their investment plan for the year : It is January 2nd and senior management of Chester meets to determine their investment plan for the year.
What is the net present value of this project : If the appropriate discount rate for the project's cash flows is 10%, what is the net present value of this project?
How large is this firm tax bill : if ABC Inc. reports taxable income of $190,000. How large is this firm's tax bill?

Reviews

Write a Review

Financial Management Questions & Answers

  Planning to save for retirement

You are planning to save for retirement over the next 25 years. To do this, you will invest $880 a month in a stock account and $480 a month in a bond account. The return of the stock account is expected to be 10.8 percent, and the bond account will ..

  Describe accounting identity for not-for-profit organization

Which of the following individuals (or groups) are NOT stakeholders in not-for- profit corporations? Which of the following statements about not-for-profit corporations is most correct? Which of the following equations best describes the accounting i..

  Requires you to make weekly payments

He charges an annual interest rate of 15.7 percent but requires you to make weekly payments and pay the loan off in full within one year.

  Oxley had its intended effects on business integrity

Your opinion on whether or not Sarbanes Oxley had its intended effects on business integrity and impact on the competitiveness of us registered companies,

  Managers pay dividends because of investor demand

The catering theory of dividends suggests that managers pay dividends because of investor demand.

  What is the cash stream worth to you in today dollars

What is the cash stream worth to you in today's dollars if your requried rate of return is 5%?

  About the trade discounts

Bernie’s Bike Shop receives the following trade discounts: 35/25/15. The vendor’s price list indicates that 35 percent off list price is for purchasing bikes in quantities of 100 or more, 25 percent off list price is for assembling the bikes for cust..

  Charge of commercial real estate development for your firm

You are in charge of commercial real estate development for your firm. you are considering developing a property that will cost $35 million to construct. The target return is 5.5% and the lease will be for 20 years and market rents suggest you will r..

  Decrease the value of a call option

Which of the following would decrease the value of a call option?

  About the cost of trade credit

A large retailer obtains merchandise under the credit terms of 1/10, net 40, but routinely takes 65 days to pay its bills. (Because the retailer is an important customer, suppliers allow the firm to stretch its credit terms.) What is the retailer's e..

  Decided to extend the terms of its trade credit

ABC has decided to extend the terms of its trade credit from "net 10" to "net 15". How much will ABC's accounts receivable increase as a result of this change?

  Assume the before-tax component costs of equity

Assume the before-tax component costs of equity, preferred stock, and debt are 14.5 percent, 11.0 percent, and 9.5 percent,

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