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?
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?
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?
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?
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?