Question

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2.) A bond that matures in 11 years has an annual coupon rate of 8 percent with interest paid annually. The bond’s face value is $1,000 and its yield to maturity is 7.5 percent. The bond can be called 3 years from now at a price of $1,060. What is the bond’s yield to call?

3.) An investor is forming a portfolio by investing $50,000 in stock A which has a beta of 1.50, and $25,000 in stock which has a beta of 0.90. B The return on the market is equal to 12 percent and Treasury bonds have a yield of 4 percent. What is the required rate of return on the investor's portfolio?

Answer 1

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