What would be the portfolio beta when the t-bill is added

Assignment Help Financial Management

Reference no: EM131878204

Current Share Price: (Stock A - $46.28) (Stock B - $72.65)

Shares Owned: (Stock A - 54,216) (Stock B - 798)

Expected Return: (Stock A - 4.47%) (Stock B - 16.87%)

Estimated Beta: (Stock A - 0.90) (Stock B - 1.20)

Portfolio Value: $2,567,091.18

Portfolio's Expected Return: 4.75%

T-bill Return/Yield: 2.0%

Target Portfolio Expected Return: 8.0%

How much money would you need to transfer from your current portfolio to the T-bill to reach the target expected return above? Assume that you maintain the ratio of Stock A to Stock B as constant. What is the current portfolio's beta? What would be the portfolio's beta when the T-bill is added? Which of these stocks is the better buy if you hold the stock in a well-diversified portfolio?

Reference no: EM131878204

Questions Cloud

Why must investor consider it when investing in real estate : What is Financial Leverage and Why must an Investor consider it when Investing in Real Estate?

The opportunity to join a group of investors : You have the opportunity to join a group of investors who are buying one of the islands in Boston Harbor.

Calculate the annual cash flows from fixed-payment annuity : Calculate the annual cash flows (annuity payments) from a fixed-payment annuity if the present value of the 20-year annuity is $1.2 million

What would you estimate as the firm dividend next year : What would you estimate as SSC’s stock price next year? What would you estimate as the firm’s dividend next year?

What would be the portfolio beta when the t-bill is added : What is the current portfolio's beta? What would be the portfolio's beta when the T-bill is added?

Sources of income would not be taxable : Profits (income) from which of the following sources of income would not be taxable?

Describe the eight components of the coso erm framework : Why might stockholders be indifferent to whether or not a firm reduces the volatility of its cash flows? Describe the eight components of the COSO ERM framework

Calculated create company income statement and balance sheet : Using the information provided and the ratios you calculated create the company's income statement and balance sheet.

Vacant land generating insignificant amounts of income : With respect to vacant land generating insignificant amounts of income, which statement is correct?

User Account

All Pages