What is the return on portfolio

Assignment Help Financial Management
Reference no: EM131531509

You have a portfolio of two stocks held in equal weights. The ABC stock has a beta of 1.3, and the XYZ stock has a beta of -0.7. The risk free rate is 3% and the market risk premium is 9%. What is the return on the portfolio?

Enter as a percent and round to the nearest hundredth of a percent.

Reference no: EM131531509

Questions Cloud

Using the endowment or borrowing the funds : Management decided to finance the project through operations rather than using the endowment or borrowing the funds.
Average return and standard deviation for population : Calculate the average return and standard deviation for population for Claymore
Require an effective annual interest rate : If you require an "effective" annual interest rate (not a nominal rate) of 8.58%, how much should you be willing to pay for the bond?
What is the yield on one year t-bonds one year from now : what is the yield on 1-year T-bonds one year from now? Be sure to use a geometric average in your calculations.
What is the return on portfolio : You have a portfolio of two stocks held in equal weights. The risk free rate is 3% and the market risk premium is 9%. What is the return on the portfolio?
How much is statistical discrepancies in surplus or deficit : What is the balance on capital account? What is the balance in official reserves account? By how much is statistical discrepancies in surplus or deficit?
Recommending to help improve the heath care industry : What solutions are you recommending to help improve the heath care industry? Analyze the costs involved with a solution.
Expected dividends-what is the current price of its stock : If CX's equity cost of capital is 12%, what is the current price of its stock?
Pay a total dividend and repurchase worth of shares : Zoom Enterprises expects that one year from now it will pay a total dividend of $5.0 million and repurchase $5.0 million worth of shares.

Reviews

Write a Review

Financial Management Questions & Answers

  What happens over time to the real interest rate and output

In 2023, a new Fed chair is appointed and resolves to return inflation to the level before 2020. Show with graphs what happens over time to the real interest rate, output, and inflation.

  Large electric utility is looking to fix its cost of gas

Entergy, a large electric utility is looking to fix its cost of gas purchases over the next 3 years. Entergy currently buys gas in the spot market at the Henry Hub spot price. Describe the flow of payments if both parties agree to the swap terms.

  Qualifies for three-year macrs depreciation

The Summitt Petroleum Corporation will purchase an asset that qualifies for three-year MACRS depreciation. The cost is $260,000 and the asset will provide the following stream of earnings before depreciation and taxes for the next four years: Calcula..

  Principal refers to funds the firm can effectively utilize

Carey Company is borrowing $225,000 for one year at 9.5 percent from Second Intrastate Bank. The bank requires a 15 percent compensating balance. The principal refers to funds the firm can effectively utilize (Amount borrowed − Compensating balance).

  Bonds outstanding with coupon rate

Union Local School District has bonds outstanding with a coupon rate of 3.7 percent paid semiannually and 15 years to maturity. The yield to maturity on these bonds is 4.3 percent and the bonds have a par value of $5,000. What is the dollar price of ..

  They will discontinue paying dividends permanently

The Red Bud Co. pays a constant dividend of $3.20 a share. The company announced today that it will continue to do this for another 2 years after which time they will discontinue paying dividends permanently. What is one share of this stock worth tod..

  Calculate the total return for investment

John Smith purchased 100 shares of XYZ stock at $40.00 a share. One year leter, he sold the stock for $50.00 a share. He paid a broker a $32.00 commission when they purchased the stock and a $40.00 commission when they sold the stock. During the 12-m..

  Thinking of purchasing a financial contract

You and a friend are both thinking of purchasing a financial contract that will pay you $500 at the end of each year for the next three years. You think the risks involved merit a rate of return of 4%, while your friend thinks that 6% is a more appro..

  Portfolio expected return-variance and standard deviation

Consider the following information on a portfolio of three stocks: State of Probability of Stock A Stock B Stock C Economy State of Economy Rate of Return Rate of Return Rate of Return Boom .15 .02 .32 .60 Normal .55 .10 .12 .20 Bust .30 .16 − .11 − ..

  Suppose the federal reserve makes a discount loan to bank

Suppose the federal reserve makes a discount loan to a bank.

  Transaction on the balance sheet of the fed

Suppose that JP Morgan Chase sells a $100 million Treasury bill to the US Federal Reserve a. Show the immediate impact of this transaction on the balance sheet of the Fed and on the balance sheet of JP Morgan Chase. writes check for this amount and t..

  Concepts is relevant to opportunity cost

Which of the following concepts is relevant to opportunity cost? The additional consumption that results from one dollar increase in disposable income represents

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