Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

problem 1: Tom Skinner consists of $45,000 invested in a stock with a beta of 0.8 and the other $55,000 invested in a stock with a beta of 1.4. These are just two investments in his portfolio. Determine his portfolio's beta?

a) 0.93
b) 0.98
c) 1.03
d) 1.08
e) 1.13

problem 2: Magee Company's stock consists of a beta of 1.20, the risk-free rate is 4.50% and the market risk premium is 5.00%. Determine the Magee's required return?

a) 10.25%
b) 10.50%
c) 10.75%
d) 11.00%
e) 11.25%

problem 3: Niendorf Corporation's stock consists of a required return of 13.00%; the risk-free rate is 7.00%, and the market risk premium is 4.00%. Now assume there is a shift in investor risk aversion and the market risk premium rises by 2.00%. What is Niendorf's new required return?

a) 14.00%
b) 15.00%
c) 16.00%
d) 17.00%
e) 18.00%

problem 4: Apex Roofing's stock consists of a beta of 1.50, its required return is 14.00% and the risk-free rate is 5.00%. Determine the required rate of return on the stock market?

a) 10.50%
b) 11.00%
c) 11.50%
d) 12.00%
e) 12.50%

problem 5: Assume that you hold a diversified portfolio comprising of $10,000 invested equally in each of 10 different common stocks. The portfolio's beta is 1.120. Now assume that you decided to sell one of your stocks that consist of a beta of 1.000 and to use the proceeds to purchase a replacement stock with a beta of 1.750. Determine the portfolio's new beta?

a) 0.982
b) 1.017
c) 1.195
d) 1.246
e) 1.519

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M97101

Have any Question? 


Related Questions in Basic Finance

According to an article in the wall street journal in late

According to an article in the Wall Street Journal, in late 2009, "Between Dec. 9 and 11, some big European and U.S. banks made bearish calls on the euro by buying one-year euro ‘puts.'" a. What is a "bearish call"? b. W ...

1 why might the after-tax internal rate of return on equity

1. Why might the after-tax internal rate of return on equity (ATIRRe) differ for a new investor versus an existing investor who keeps the property? 2. What factors should be considered when deciding whether to renovate a ...

Prove that algorithm 1019 in the special case where every

Prove that Algorithm 10.19, in the special case where every operation requires only one unit of one resource, can always find a softwarepipeline schedule meeting the lower bound. Suppose we have a cyclic data-dependence ...

What is the sum of the cash flows from operating activities

What is the sum of the cash flows from operating activities, financing activities, and investing activities? What does it mean that the financial statements are prepared based on historical cost? Where can an investor fi ...

Mm proposition i with taxesthe maxwell company is financed

MM Proposition I with Taxes The Maxwell Company is financed entirely with equity. The company is considering a loan of $1.72 million. The loan will be repaid in equal installments over the next two years, and it has an i ...

1 develop at least three behavioral measures of each of the

1. Develop at least three behavioral measures of each of the following conceptual variables. Consider measures that are based on frequency, speed, duration, latency, and intensity. Consider the extent to which each of th ...

1 how does lowest tco differ from lowest purchase price2

1. How does lowest TCO differ from lowest purchase price? 2. What is the underlying rationale that explains why firms should segment their purchase requirements? 3. Explain how constraints in manufacturing are interrelat ...

1 using the internet the library or another information

1. Using the Internet, the library, or another information source, print out three different articles that describe the same disaster event. Compare the three articles to determine which provides the most useful informat ...

Both old line industries and new tech inc use the irr to

Both Old Line Industries and New Tech, Inc., use the IRR to make investment decisions. Both firms are considering investing in a more efficient $4.5 million mail-order processor. This machine could generate after-tax sav ...

Suppose one year ago a swiss investor bought one year us

Suppose one year ago a Swiss investor bought one year U.S. Treasury bills at a price of $9,500 with a maturity value of $10,000. The exchange rate at that time was 1.420 Swiss francs per dollar. Today, at maturity, the i ...

  • 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