What is the portfolio beta

Assignment Help Financial Management
Reference no: EM131057679

An investor has put money in four stocks in the dollar amounts indicated and with betas specified. What is the portfolio beta? Stock A $3,979 with a beta of 1; stock B $6,080 with a beta of 1.21; stock C $5,129 with a beta of 0.91; and stock D $7,172 with a beta of 1.15. Show your answer rounded to two decimal points.

Reference no: EM131057679

Questions Cloud

What should be duration in order for loan to be approved : A bank is planning to make a loan of $5,000,000 to a firm in the steel industry. It expects to charge a servicing fee of 50 basis points. The loan has a maturity of 8 years with a duration of 7.5 years. The cost of funds (the RAROC benchmark) for the..
Shares of common stock outstanding-dividend payout ratio : Prince Systems(PS) has 500,000 shares of common stock outstanding and its EPS is $7. The firm has a dividend payout ratio of 35% and the current market price of its stock is $75.
What do rights and duty ethics : What does utilitarianism tell us about this case? What do rights and duty ethics tell us? Consider these questions from the point of view of a design engineer who must work on a product that might emit hazardous radiation. Which ethical theory applie..
What should be current stock price : Ranyard's beta is 1.13, and the last dividend per share paid was $4.21. The market risk premium is estimated to be 7.56%, and the real rate of interest is 2.04%. The liquidity risk premium is 0.7%. Analysts expect the company to grow at a rate of 3.5..
What is the portfolio beta : An investor has put money in four stocks in the dollar amounts indicated and with betas specified. What is the portfolio beta?
Devaition of the equally weighted portfolio portfolio : Stock A has an expected return of 10% and a standard deviation of 5%. Stock B has an excpted return of 15% and a standard deviation of 10%. The risk free rate is 11.67%. E(r) of the equally weighted portfolio is 12.22%, standard devaition of the equa..
Evaluate average-risk projects : G. Cinquetti Corporation (GCC), uses a cost of capital of 10 percent to evaluate average-risk projects, and it adds or subtracts 3 percentage points to evaluate projects of more or less risk. The company uses coefficient of variation (CV) to measure ..
What is the npv of the packing machine : A project being considered is a semiautomated packing unti that would cost $390,000 including installation. This project would use the 7 year MACRS schedule with no residual value. What is the NPV of the packing machine?
How much will ultimate have to borrow : Ultimate Snowboards is in need of $400,000 to purchase a new buffing machine. Funds can be obtained from a bank at 8 percent discount interest for one year. How much will Ultimate have to borrow? What is the effective rate on this loan?

Reviews

Write a Review

Financial Management Questions & Answers

  What would be the cost of the protective put portfolio

You would like to be holding a protective put position on the stock of XYZ Co. to lock in a guaranteed minimum value of 240 at year-end. XYZ currently sells for 240. How much would it cost to purchase if the desired put option were traded? What would..

  What is the total market value of its equity

Consolidated Pasta is currently expected to pay annual dividends of $10 a share in perpetuity on the 2.8 million shares that are outstanding. Shareholders require a 8% rate of return from Consolidated stock. What is the total market value of its equi..

  Investor stocks expected return exceeds

If in the opinion of a given investor a stock's expected return exceeds its required return, this suggests that the investor thinks

  What is the nominal and effective cost of trade credit

What is the nominal and effective cost of trade credit under the credit terms of 3/10, net 40? Assume 365 days in a year for your calculations.

  Nominal rate of return-what is the inflation rate

If your nominal rate of return is 14.38 percent and your real rate of return is 4.97 percent, what is the inflation rate?

  Important in capital budgeting cash flow analysis

Net working capital investment is important in capital budgeting cash flow analysis because:

  Find the coupon rate-use a trial and error solution method

Large Industries annual bonds are selling at 102 (i.e., the price is $1,020 for the $1,000 bond). There are 7 years remaining until maturity on the bonds and the yield to maturity is 5.25%. Find the coupon rate. (Note: you may have to use a trial and..

  Determine the proposed alternatives regarding insulin

Determine the two proposed alternatives regarding the insulin pump. Based upon your evaluation recognize which alternative should be selected and support your decision.

  What is the value of your equal withdrawals

You have $430,000 in your retirement account, If you plan to retire immediately and decide to invest in an equity which pays 6% interest for future use. What is the value of your equal withdrawals for the next 30 years.

  Should the company replace the old machine

If Company A is considering the replacement of its old, fully depreciated knitting machine. Two new models are available: Machine 190-3, which has a cost of $219,000, a 4-year expected life, and after-tax cash flows (labor savings and depreciation) o..

  Constant growth rate-investors required rate of return

Calculate the price that you would be willing to pay for a constant growth stock that has the following characteristics: (a) Annual Dividend: $1.23, (b) Constant Growth Rate: 5.6%, and (c) Investor’s required rate of return: 6.5%.

  Treasury bills are typically much lower than interest rates

Interest rates on U.S. treasury bills are typically much lower than interest rates on U.S. treasury notes and bonds. If the federal government wants to reduce the interest charges it pays when it barrows money, why doesn't the treasury stop selling t..

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