What must the beta be for the other stock in your portfolio

Assignment Help Financial Management
Reference no: EM13870716

You own a portfolio equally invested in a risk-free asset and two stocks. One of the stocks has a beta of 1.15 and the total portfolio is equally as risky as the market.

Required: What must the beta be for the other stock in your portfolio?

Reference no: EM13870716

Questions Cloud

Accomplishment will be reflected in firms financial ratios : The corner hardware has succeeded in increasing the amount of goods it sells while holding the amount of inventory on hand at a constant level. Assume that both the cost per unit and the selling price per unit also remained constant. This accomplishm..
Curiosity-creating value are key parts of entrepreneurial : Creativity, curiosity and creating value are key parts of the entrepreneurial mindset that won’t always prevent failure. Which of the following will help you avoid failure? “
What is the present value of this two-year loan : Your car loan requires payments of $200 per month for the first year and payments of $400 per month during the second year. The annual interest rate is 12% and payments begin in one month. What is the present value of this two-year loan?
Funding jill morans 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 must Sunrise accumulate by the end of ye..
What must the beta be for the other stock in your portfolio : You own a portfolio equally invested in a risk-free asset and two stocks. One of the stocks has a beta of 1.15 and the total portfolio is equally as risky as the market. What must the beta be for the other stock in your portfolio?
What must the beta of this stock be : A stock has an expected return of 14.6 percent, the risk-free rate is 5.70 percent, and the market risk premium is 7.3 percent. Required: What must the beta of this stock be?
Annuity symbols based on effective annual interest rate : A woman wants to prepare for retirement. On her 25th birthday she begins making monthly deposits of $Y into a fund which earns an annual effective interest rate of 8%. The last deposit is one month prior to her 65th birthday. Write an expression for ..
Savings account with discount rate per year : Danielle deposits $12,000 in a savings account with a discount rate of 10% per year. After 15 years, Danielle moves the money to an account that accumulates at a force of interest of 8%. At that same time, Danielle begins withdrawing money continuous..
What must the expected return on the market be : A stock has an expected return of 10.2 percent, its beta is 1.03, and the risk-free rate is 6.40 percent. What must the expected return on the market be?

Reviews

Write a Review

Financial Management Questions & Answers

  Define what is the coupon rate for a bond

What is the coupon rate for a bond (face value $1,000) with five years until maturity, a price of $957.88, and a yield to maturity of 6%? What is the current yield for this bond?

  Shares of cumulative preferred stock outstanding

Enterprise Storage Company has 440,000 shares of cumulative preferred stock outstanding, which has a stated dividend of $7.75. it is six years in arrears in dividend payments. How much in total dollars is the company behind in its payments? $20,460,0..

  Annum with semi-annual compounding

The six month and one-year rates are 3% and 4% per annum with semi-annual compounding. Is 3.90% or 3.95% or 3.99% closest to the one-year par yield expressed with semi-annual compounding?

  What is the expected price of stock

What is the expected price of Stock C four years from now if growth (g) is 6%, and the investors are requiring 11%, (the required rate of return, r is 11%) and the current dividend, Do, is $1.75. Calculate expected P^4.

  What is the amount of the firms ebit

Advantage First Corporation has sales of $4,466,950: income tax of $396,030; the selling, general, and administrative expenses of $283,516; depreciation of $342,761; cost of goods sold of $2,682,040; interest expense of $190,074. What is the amount o..

  What rate should shop report-what is effective annual rate

Ricky Ripov’s Pawn Shop charges an interest rate of 15 percent per month on loans to its customers. Like all lenders, Ricky must report an APR to consumers: What rate should the shop report? (Round your answer as directed, but do not use rounded numb..

  Estimate the real interest rate

Economists estimate the one- year inflation rate to be 4 percent in the United States. The one- year Treasury bill with a face value of USD 100 is quoted at a discount of USD 2.5 from face value. Estimate the real interest rate. (use p.pp%)

  How much better it is in present value terms

You are considering buying a house for $200,000. You have $40,000 in your bank account which pays 1% APR compounded monthly. If you contribute 10% of the price of the house as a down payment, the terms of your mortgage will be an original balance of ..

  Capital budgeting analysisthe sl energy group is planning a

capital budgeting analysisthe sl energy group is planning a new investment project which is expected to yield cash

  How do they earn their return on equitywhen we discussed

how do they earn their return on equity?when we discussed dupont analysis and corporate strategy we noted that return

  What single annual rate of interest

Bill Christenson deposited $40,000 in his credit union on September 23, 1993. Recently, while going through some papers he discovered the account. How much should Bill have in this account on September 23, 2015? If Bill had invested in a twenty-two y..

  The degree of operating leverage for level of production

The Poseidon Swim Company produces swim trunks. The average selling price for one of their swim trunks is $84.44. The variable cost per unit is $22.14, Poseidon Swim has average fixed costs per year of $5,685. Determine the degree of operating levera..

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