Task1. Find the effective annual rate (EAR) for a 14.7% APR with monthly compounding.
Task2. Assume you are going to get $ 15,000 per year for 9 years at the commencement of each year. Compute the present value of the cash flows if the proper interest rate is 11 percent.
Task3. Our client has the subsequent portfolio:
Company # of Shares
Dram 5000
Mon 25000
Call 27000
Esea 13000
Aig 10000
Using available resources, find out this portfolio's beta.
Once you have determined the portfolio beta, find out what adjustments should be made to achieve a portfolio beta of 1.25 maintaining the same number of aggregated shares in the portfolio. Also, your client wishes to keep all of these equities in their portfolio devoid of adding any new equities.