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

1 describe integrative management be specific concerning

1. Describe "integrative management." Be specific concerning the relationship between functionality and process. 2. In terms of enterprise extension, describe the importance of the information sharing and process special ...

1 what are four primary reasons that behavioral researchers

1. What are four primary reasons that behavioral researchers use case studies? 2. What is a psychobiography? 3. Why are behavioral scientists reluctant to trust case studies as a means of testing hypotheses?

You have the following information on universe it ts inc

You have the following information on Universe It Ts, Inc.: sales to working capital = 19 times, profit margin = 26.9%, net income available to common stockholders = $4.9 million, and current liabilities = $1.9 million. ...

What would be the cumulative scatter of the four variables

What would be the cumulative scatter of the four variables we used in the Figures 17.2 through 17.7 if we combined them arithmetically? How does this compare with the scatter computed in the text using the square root of ...

1 what is the required rate of return on a common stock

1. What is the required rate of return on a common stock that is expected to pay a $0.75 annual dividend next year if dividends are expected to grow at 2% annually and the current stock price is $8.59? 2. Inc. paid $.130 ...

Assume a linear velocity distribution and a linear

Assume a linear velocity distribution and a linear concentration profile in the laminar boundary layer over a flat plate. Apply the boundary conditions for a laminar boundary layer and evaluate the velocity and concentra ...

Ginger baker inc just paid an annual dividend of 3 a share

Ginger Baker, Inc. just paid an annual dividend of $3 a share and this dividend is expected to grow at a rate of 4% per year for the foreseeable future. If the discount rate for Ginger Baker is 9%, what is the current pr ...

1 a present an argument for why translation exposure is

1 .(a) Present an argument for why translation exposure is relevant to an MNC. (b) Present an argument for why translation exposure is not relevant to an MNC. 2 .Walt Disney Inc built the EuroDisney theme park in France ...

An investor has projected three possible scenarios for a

An investor has projected three possible scenarios for a project as follows: Pessimistic-NOI will be $200,000 the first year, and then decrease 2 percent per year over a five-year holding period. The property will sell f ...

An article in the wall street journal noted that of the

An article in the Wall Street Journal noted that of the thousands of mutual funds investing in stocks or stocks and bonds, only 31 had managed to earn a higher rate of return than the S&P 500 in every year from 1999 thro ...

  • 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

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

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen