Ask Question, Ask an Expert


Ask Basic Finance Expert

1) Given following probability distribution for assets x and y, find out expected rate of return, variance, standard deviation, and coefficient of variation for two assets. Which asset is a better investment?

Return Probability Return Probability
8% .10 10% .25
9% . 20 11% .35
11% . 30 12% .40
12% .40

2) You are going to invest= $20,000 in portfolio consisting of assets x, y, z, as follows:

Asset Annual Return Probability Beta Proportion
X 10% .50 1.2 .33333
Y 8% .25 1.6 .33333
Z 16% .25 2.0 .33333

a) Giving the information in the above table, what is the expected annual return of this portfolio?

b) Determine the beta of this portfolio?

3) Dr. Ray is considering investment in the project with beta coefficient of= 1.75. What would you suggest him to do if this investment has= 11.5% rate of return, risk free rate is= 5.5%, and rate of return on market portfolio of assets is= 8.5 %?

4) Asset Y has a beta of= 1.2. Risk free rate of return is 6%, whereas the return on market portfolio is 12%. Assets market risk premium is?

5) Supposing a risk-free rate of= 8% and market return of= 12%, would wise investor obtain security with beta of 1.5 and a rate of return of= 14% given facts above?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M914886

Have any Question? 

Related Questions in Basic Finance

Diamond inc recently paid a 110 dividend future dividends

Diamond, Inc recently paid a $1.10 dividend. Future dividends are projected at $1.14, $1.18, $1.22, and $1.25over the next four years, respectively. Beginning five years from now, the dividend is expected to increase by ...

Can someone help provide the steps and solution to this

Can someone help provide the steps and solution to this problem. X-treme Vitamin Company is considering two investments, both of which cost $10,000. The cash flows are as follows: Year Project A Project B 1.............. ...

Treasury bills versus treasury notes and changes in

Treasury Bills versus Treasury Notes and Changes in Interest Rates The daily market transactions for treasury instruments are in the billions. The current average daily volume of "Treasuries" is approximately $150 billio ...

1 what is the law of one price how is it related to the

1. What is the law of one price? How is it related to the theory of purchasing power parity (PPP)? 2. Is PPP a theory of exchange rate determination in the long run or in the short run? 3. According to the theory of purc ...

Mini case amgen corporationthe amgen corporation spent

MINI CASE: AMGEN CORPORATION The Amgen Corporation spent several years working on developing a product that can be used to provide a healthy supplement to a variety of food products. The benefits of a new supplement have ...

Sorenson inc has sales of 5119000 a gross profit margin of

Sorenson Inc. has sales of $5,119,000, a gross profit margin of 32.18 percent, and inventory of $1,017,000. What are the company's inventory turnover ratio and days' sales in inventory?

1 in general would a falling rate of market interest cause

1. In general, would a falling rate of market interest cause the price of an MPT security to increase or decrease? Would the increase or decrease be greater if the security was issued at a discount? Would an increase in ...

Write a product recall letteryou have received two reports

Write a product recall letter. You have received two reports that users of your ten-stitch portable sewing machine, Sew-Now, have been injured when the needle broke off while sewing. One person was sewing lined denim, an ...

Does a large bolt-to-joint stiffness ratio increase or

Does a large bolt-to-joint stiffness ratio increase or decrease the possibility of fatigue failure of the bolt and why? Name at least three bolt, thread, or bolt and thread configurations which can improve the fatigue re ...

Which is more apt to fail by hydrogen embrittlement an sae

Which is more apt to fail by hydrogen embrittlement, an SAE J429 Grade 5 or a Grade 8 fastener and why? Name at least three ways to reduce the possibility of hydrogen embrittlement ? What are the essential conditions for ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro