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

1read the following article on dimensional fund

1. Read the following article on Dimensional Fund Advisors: http://www.wsj.com/articles/making-billions-with-one-belief-the-markets-cant-be-beat-1476989975 Write a composed essay (1 page max) addressing the following que ...

1 what part of the federal fair housing act is applicable

1. What part of the federal Fair Housing Act is applicable to an apartment project? 2. Define net lease. 3. Why does shopping center management promote shopper-attraction activities? 4. How does a shopping center utilize ...

Question 1 - bondsyou have just purchased 5 million par

Q UESTION 1 - B ONDS You have just purchased $5 million par amount of the 5yr and 30yr US Treasury bonds shown below, at the prices shown. (Assume all bonds are semi-annual compounding.)   Par Amt            Coupon       ...

1 what do you see as the biggest challenges in conducting a

1. What do you see as the biggest challenges in conducting a brand audit? What steps would you take to overcome them? 2. Pick a brand. See if you can assemble a brand inventory for it.

Mountain minerals pays a constant annual dividend one year

Mountain Minerals pays a constant annual dividend. One year ago, when you purchased shares of that stockat $40 a share, the dividend yield was 6.5 percent. Over this past year, the inflation rate has been 3.2 percent.Tod ...

If there are costs associated with financial distress how

If there are costs associated with financial distress, how may this affect the capital structure decision of a company? Why do we adjust for taxes in determining the cost of debt, but not for the costs of preferred stock ...

Professors note your answer is close but incorrectnbsp

Professors Note: Your answer is close but incorrect.  Please review "calculating the effective cost of short term credit" in your text.  You need to make sure that the note amount is the NET amount (what Worthington actu ...

A project has an initial cash outflow of 39800 and produces

A project has an initial cash outflow of $39,800 and produces cash inflows of $18,304, $19,516, and $14,280 for years 1 through 3, respectively. What is the NPV at a discount rate of 11 percent?

Comparing investment criteria consider the following two

Comparing investment criteria. Consider the following two mutually exclusive projects: Year               Cash Flow (A)                   Cash Flow (B) 0                     -$455,000                          -$65,000 1  ...

1 define amortization list the five types discussed2 why do

1. Define amortization. List the five types discussed. 2. Why do the monthly payments in the beginning months of a CPM loan contain a higher proportion of interest than principal repayment?

  • 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