Question

XYZ has an expected return of 10%. What is the expected return of your investment if...

  1. XYZ has an expected return of 10%. What is the expected return of your investment if you buy XYZ on margin (MR = .40). Assume you borrowing cost = 5%.   Answer and show your work

Homework Answers

Answer #1

ANSWER IN THE IMAGE ((YELLOW HIGHLIGHTED). FEEL FREE TO ASK ANY DOUBTS. THUMBS UP PLEASE.

Ans: 17.50%

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
XYZ has an expected return of 10%. What is the expected return of your investment if...
XYZ has an expected return of 10%. What is the expected return of your investment if you buy XYZ on margin (MR = .40). Assume you borrowing cost = 5%
The expected market return is 9%. The risk-free rate, 1.5%. Your risky asset XYZ has a...
The expected market return is 9%. The risk-free rate, 1.5%. Your risky asset XYZ has a beta of 0.85 and an expected return of 10.50%. According to the CAPM model, Select one: a. Your asset XYZ is perfectly priced in the market. b. Your asset XYZ is underpriced in the market. c. No answer d. Your asset XYZ is overpriced in the market. e. There is not enough data to answer.
Stock XYZ has   an expected return of 6.0%. The S&P500 has an expected return of 7.0%....
Stock XYZ has   an expected return of 6.0%. The S&P500 has an expected return of 7.0%. The riskless rate is 2.0% and XYZ's beta is 10.0. Is XYZ overpriced or underpriced according to CAPM? Answer 1 for underpriced and -1 for overpriced.
What is the expected return of a two-stock portfolio if you invest 40% of your investment...
What is the expected return of a two-stock portfolio if you invest 40% of your investment into a stock with the expected return of 8% and 60% into a stock with the expected return of 13%? Round to the nearset hundredth percent. Answer in the percent format. Do not include % sign in your answer (i.e. If your answer is 4.33%, type 4.33 without a % sign at the end.)
Investment A has a standard deviation of 12% and an expected return of 10%. Investment B...
Investment A has a standard deviation of 12% and an expected return of 10%. Investment B has a standard deviation of 18%, but an expected return of 12%. Which project is preferable from a risk return point of view? Please answer quantitatively, by calculating the coefficient of variation of the investments.
you’ve formed an optimal 10-stock portfolio with an expected return of 20% and standard deviation of...
you’ve formed an optimal 10-stock portfolio with an expected return of 20% and standard deviation of 32%. an investor is willing to spend her investment budget of $100,000 in shares of Laggard Corp. which has an expected return of 12% and standard deviation of 40%. You tell her that you can offer a much better investment alternative with the same standard deviation of Laggard and higher expected return. If the risk-free rate is 4% (lending or borrowing), and given the...
XYZ has an investment worth $56,000. The investment will make a special, extra payment of X...
XYZ has an investment worth $56,000. The investment will make a special, extra payment of X to XYZ in 2 years from today. The investment also will make regular, fixed annual payments of $12,000 to XYZ with the first of these payments made to XYZ in 1 year from today and the last of these annual payments made to XYZ in 5 years from today. The expected return for the investment is 12.3 percent per year. What is X, the...
XYZ has an investment worth $56,000. The investment will make a special, extra payment of X...
XYZ has an investment worth $56,000. The investment will make a special, extra payment of X to XYZ in 3 years from today. The investment also will make regular, fixed annual payments of $12,000 to XYZ with the first of these payments made to XYZ in 1 year from today and the last of these annual payments made to XYZ in 5 years from today. The expected return for the investment is 12.3 percent per year. What is X, the...
Calculate standard deviation Your investment has a 40% chance of earning a 15% rate of return,...
Calculate standard deviation Your investment has a 40% chance of earning a 15% rate of return, a 50% chance of earning a 10% rate of return, and a 10% chance of losing 3%. What is the standard deviation of this investment? A. 8.43% B. 5.14% C. 9.29% D. 7.59% Expected return and volatility of a portfolio An investor invests 70% of her wealth in a risky asset with an expected rate of return of 15% and a variance of 5%,...
An investment has an expected return of 9.25 percent and standard deviation of 3.38 percent. Another...
An investment has an expected return of 9.25 percent and standard deviation of 3.38 percent. Another investment has an expected return of 14 percent and a standard deviation of 4.93 percent. What is the expected return of the portfolio and its standard deviation if both are combined into a portfolio with 70 percent invested in the first investment and 30 percent in the second? Assume the correlation coefficient (ij) is -.40
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT