What is the expected portfolio return

Assignment Help Accounting Basics
Reference no: EM133093460

Question - Your current investment portfolio consists of the following:

Security

Investment

Expected Return

Beta

Stock 1

$10,000

8.0%

1.2x

Stock 2

6,000

4.0%

0.8x

Risk-free Deposit

4,000

1.0%

0.4x

Required -

(a) What is the expected portfolio return?

(b) If the average market return is 5%, what is the required return of this portfolio?

(c) Based on your results in parts (a) and (b), would you be willing to keep this portfolio? Explain.

(d) Define the concept of Beta as it relates to security pricing.

(e) Is this portfolio in "equilibrium"? Explain.

Reference no: EM133093460

Questions Cloud

How much is the interest income for the year : The present value of an ordinary annuity of 1 for three periods is 2.4018. How much is the interest income for the year 2019
Novel and adaptive thinking : What was the BEST part/your favorite part of working in a group? What did you like about it? Give an example
Training directly affect work force diversity : How do recruitment, selection, orientation and training directly affect work force diversity?
Learned about organizational leadership : Do a reflective thinking which highlights what you learned about organizational leadership and how you can apply these learnings to your future as a leader.
What is the expected portfolio return : What is the expected portfolio return? Based on your results in parts (a) and (b), would you be willing to keep this portfolio? Explain
Explain the concept of partnership drivers : Explain the concept of partnership drivers and identify four partnership drivers.
Agriculture challenge the notion of sustainable development : Are there specific stakeholders that are impacted more significantly by the use of pesticides in agriculture?
Should the company manufacture the new product or not : The applicable corporate tax rate is 30%, while the required rate of return is 12% per year. Should the company manufacture the new product or not
Compute the estimated inventory at march : The records of MTL Electric Department Store provided the following data as of March 31, 2018: Compute the estimated inventory at March

Reviews

Write a Review

Accounting Basics Questions & Answers

  Record the March entry for the sale

Assume a December 31 year end and that the company has already recorded the current year's depreciation. Record the March 31, 20X5, entry for the sale

  Compute basic and diluted eps for the two years

Compute basic and diluted EPS for the two years

  Discuss what is total average cost per unit

A companys costs are shown below. What is total average cost per unit

  Identify something you want to change in the company

Identify something you want to change in the company and identify and explain the impact of the change. Identify a financial report related to your proposed.

  Calculate the rate of return on investment

Use the DuPont formula to calculate the rate of return on investment, and show the profit margin, the investment turnover, and rate of return on investment

  Financial statement analysis paper individual assignment

One basic method that an accountant can use to analyze the financial situation of a business is ratio analysis. This can be a useful tool no matter the type of legal structure of the business and regardless of whether or not ownership is public or..

  Prepare the bank reconciliation at september

The September bank statement shows a balance of $16,500 at September 30 and the following memoranda. Prepare the bank reconciliation at September 30, 2012

  Which would be opportunity costs

John has been offered a job in New York City at a salary of $50,000 per year. Currently, John lives and works in the Midwest at a salary of $35,000 per year.

  Determine the percentage of the fund

Determine the percentage of the fund that is internally generated and the percentage of the fund that is externally generated for each selected company.

  Manufacturing process that the company plans

On January 4, 2010, the Franc Company purchased for $27,000 a patent that had been filed eight years earlier.

  Compute what is the target cost

Furthermore, management believes that the profit margin should be 40 percent of sales revenue. What is the target cost

  Compute what the day sales in receivable is

What The day sales in receivable is? Merchandising on June 30, 2017: Sales, P 550,000; Sales Discount, 5%; Gross profit, P209,000; operating expenses, P150,000

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