What is the portfolio beta

Assignment Help Financial Management
Reference no: EM131060914

As an investment bank manager, you have the following three investments in your current portfolio. a.) GM shares: 900 shares, trade for $30/share, beta=0.9 b.) JP Morgan shares: 500 shares, trade for $80/share, beta=1.1 c.) MGM shares: 1000 shares, trade for $35/share, beta=2.0 What is the portfolio beta? (round to 4 decimals if possible)

Reference no: EM131060914

Questions Cloud

Shares outstanding and an equity cost of capital : Tolo Co. plans the following repurchases: $9.6 million in one year, nothing in two years, and $20.3 million in three years. After that, it will stop repurchasing and will issue dividends totaling $26 million in four years. The total paid in dividends..
The growth rate falling off to constant : Janicex Co. is growing quickly. Dividends are expected to grow at a rate of 20 percent for the next three years, with the growth rate falling off to a constant 5 percent thereafter. If the required return is 11 percent and the company just paid a div..
Conduct a literature review that addresses current issues : Topic - Current Business Problem: Talent Gap/Management Faced By Australian Companies. Conduct a literature review that addresses current issues in research methods
Determining the implementation of the technology : While initially the focus was on implementation of the technology, it was found that success will require at least 10 hours of training over two days for all managers across the country on both the use of the new platform as well as a host of new ..
What is the portfolio beta : As an investment bank manager, you have the following three investments in your current portfolio. a.) GM shares: 900 shares, trade for $30/share, beta=0.9 b.) JP Morgan shares: 500 shares, trade for $80/share, beta=1.1 c.) MGM shares: 1000 shares, t..
Required rate of return on the market : Fiske Roofing Supplies' stock has a beta of 1.23, its required return is 12.00%, and the risk-free rate is 4.30%. What is the required rate of return on the market? (Hint: First find the market risk premium.)
What were the pros and cons of reconstruction : What were the pros and cons of Reconstruction? How could rebuilding the South and helping the former slaves been improved? Why did Reconstruction collapse? Could it have been avoided?
What is the certainty-equivalent price : On the London Metals Exchange the price for copper to be delivered in one year is $3,530 a ton. (Note: Payment is made when the copper is delivered.) The risk-free interest rate is 0.58% and the expected market return is 8%. What is the certainty-equ..
What are the rights of dissenting shareholders : The Trapp Family Lodge, Inc. (TFL), was incorporated in 1962 as a holding company for certain assets of the Von Trapp family, including the Trapp Family Lodge, a resort hotel in Stowe, Vermont, and other assets, including certain royalty rights relat..

Reviews

Write a Review

Financial Management Questions & Answers

  Shares of common stock and two bond issues outstanding

Filer Manufacturing has 9.3 million shares of common stock outstanding. The current share price is $63, and the book value per share is $5. Filer Manufacturing also has two bond issues outstanding. The company’s stock has a beta of 1.3. The risk-free..

  Credit card-what is the annual effective rate of interest

Your monthly statement from your bank credit card shows that the monthly rate of interest is 1.2%. What is the annual effective rate of interest you are being charged on your credit card if it's compounded annually?

  Portfolio consisting of up-and-in call and up-and-out call

What is the equivalent payoff of a portfolio consisting of an up-and-in call and an up-and-out call?

  What is the initial cash outlay associated with this project

You are considering expanding your product line that currently consists of skateboards to include gas-powered skateboards, and you feel you can sell 7,000 of these per year from 10 years ( after which time this project is expected to shut down with s..

  About the retirement annuity

Funding Jill Moran’s Retirement Annuity: Sunrise Industries wishes to accumulate funds to provide a retirement annuity for its vice president of research, Jill Moran. Ms. Moran by contract, will retire at the end of exactly 12 years. How large a sum ..

  Examine potential results of measuring fair market value

Examine the potential results of measuring the fair market value of the equity-based compensation at the grant date on financial statements under GAAP only. Provide recommendations you would make to minimize any distortions in fair market value

  Estimates that net cash flows for the acquired company

Company X wants to acquire another similar company. It estimates that net cash flows for the acquired company will be $8,500,000 per year for 10 years. The cost is $50,000,000. The company's cost of capital is 10 percent. Should the company go ahead ..

  Western societies-positive for given political system

Most people in Western societies have been socialized to believe that change is associated with progress and is generally a good thing. However, the ideology of conservatism does not make this assumption. What are the conservative’s views about chang..

  Cash flow is expected to grow at a constant rate

A 35-year maturity financial security is expected to have a cash flow of $230 one year form today. The cash flow is expected to grow at a constant rate of 12% per year for its life. The required rate of return on asset is 14%. What is the maximum pri..

  The nominal annual yield-to-maturity on these bonds

Dexter Mills issued 25-year bonds two year ago at a coupon rate of 10 percent. The bonds make semi annual payments. The nominal annual yield-to-maturity on these bonds is 9 percent. What is the current bond price?

  An investment banker has recommended

An investment banker has recommended a $100,000 portfolio containing assets B, D, and F. $20,000 will be invested in asset B, with a beta of 1.5; $50,000 will be invested in asset D, with a beta of 2.0; and $30,000 will be invested in asset F, with a..

  Payments are made at the beginning of each year

A saver wants $180,000 after 10 years and believes that it is possible to earn an annual rate of 10 percent on invested funds. What amount must be invested each year if the payments are made at the BEGINNING of each year?

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