Question

Your portfolio consists of $66,347 invested in a stock that has a beta = 0.9, $59,537...

Your portfolio consists of $66,347 invested in a stock that has a beta = 0.9, $59,537 invested in a stock that has a beta = 1.2, and $31,210 invested in a stock that has a beta = 2. The risk-free rate is 3.2%. Last year this portfolio had a required return of 14.9%. This year nothing has changed except that the market risk premium has increased by 2.6%. What is the portfolio’s current required rate of return?

Homework Answers

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
Stock X has a 10% expected return, a beta coefficient of 0.9, and a 35% standard...
Stock X has a 10% expected return, a beta coefficient of 0.9, and a 35% standard deviation of expected returns. Stock Y has a 12.5% expected return, a beta coefficient of 1.2, and a 25% standard deviation. The risk-free rate is 6%, and the market risk premium is 5%. a. Calculate each stock’s coefficient of variation. b. Which stock is riskier for a diversified investor? c. Calculate each stock’s required rate of return. d. On the basis of the two...
Stock X has a 10% expected return, a beta coefficient of 0.9, and a 35% standard...
Stock X has a 10% expected return, a beta coefficient of 0.9, and a 35% standard deviation of expected returns. Stock Y has a 12.5% expected return, a beta coefficient of 1.2, and a 25% standard deviation. The risk-free rate is 6%, and the market risk premium is 5%. a. Calculate each stock’s coefficient of variation. b. Which stock is riskier for a diversified investor? c. Calculate each stock’s required rate of return. d. On the basis of the two...
You have a portfolio with $5,000 invested in Stock A with a beta of 0.9, $8,000...
You have a portfolio with $5,000 invested in Stock A with a beta of 0.9, $8,000 in Stock B with a beta of 1.8, and $10,000 in Stock C with a beta of 2.0. What is the beta and return of the portfolio? A. beta = 1.78, Return = 9.80% B. beta = 1.69, Return = 12.15% C. beta = 1.57, Return = 9.28% D. beta = 1.78, Return = 14.9%
Given the following probability distribution, what are the expected return and the standard deviation of returns...
Given the following probability distribution, what are the expected return and the standard deviation of returns for Security J? State                      Pi                              rj     1                          0.2                           12%     2                          0.3                           4%     3                          0.5                           17% Group of answer choices 12.10%; 5.93% 12.30%; 5.63% 12.40%; 5.63% 12.30%; 5.93% 12.10%; 5.63% Suppose you hold a diversified portfolio consisting of a $6,485 invested equally in each of 20 different common stocks.  The portfolio’s beta is 0.81.  Now suppose you decided to sell one of your stocks that has a beta of 1.4 and to use the proceeds...
A portfolio has the following stocks: Stock Amount Invested Stock's Beta A $2,000 1.4 B $8,000...
A portfolio has the following stocks: Stock Amount Invested Stock's Beta A $2,000 1.4 B $8,000 1.2 C $15,000 1.6 Suppose that the risk-free rate of return is 4% and the market return is 20%. (1) What are the weights for Stocks A, B and C, respectively? ( 2) What is the portfolio’s beta? (3) What is the expected return for Stock A? (4) What is the expected return for the portfolio?
Suppose SNAP stock has a beta of 1.71​, whereas Walmart stock has a beta of 0.9....
Suppose SNAP stock has a beta of 1.71​, whereas Walmart stock has a beta of 0.9. If the​ risk-free interest rate is 5.5% and the expected return of the market portfolio is 10.7%​,according to the​ CAPM, a. What is the expected return of SNAP​ stock? b. What is the expected return of Walmart​ stock? c.What is the beta of a portfolio valued at​ $1 million that consists of​ $550,000 in 60% SNAP stock and​ $450,000 invested in 40% Walmart​ stock?...
Consider a $10 million portfolio that consists of the following five stocks: Stock $Amount Invested Beta...
Consider a $10 million portfolio that consists of the following five stocks: Stock $Amount Invested Beta A 4 million 1.7 B 2 million 1.1 C 2 million 1.0 D 1 million 0.7 E 1 million 0.5 What is the required return on this portfolio if the risk free rate of return is 5.9% and the market risk premium is 5%?
You want your portfolio beta to be 1.30. Currently, your portfolio consists of $100 invested in...
You want your portfolio beta to be 1.30. Currently, your portfolio consists of $100 invested in stock A with a beta of 1.4 and $300 in stock B with a beta of .6. You have another $400 to invest and want to divide it between an asset with a beta of 1.8 and a risk-free asset. How much should you invest in the risk-free asset?
Suppose you have a portfolio that has $100 in stock A with a beta of 0.9,...
Suppose you have a portfolio that has $100 in stock A with a beta of 0.9, $400 in stock B with a beta of 1.2, and $300 in the risk-free asset. You have another $200 to invest. You wish to achieve a beta for your whole portfolio to be the same as the market beta. What is the beta of the added security? Give an example of a firm that may have such a beta.
1. Your investment club has only two stocks in its portfolio. $30,000 is invested in a...
1. Your investment club has only two stocks in its portfolio. $30,000 is invested in a stock with a beta of 0.5, and $45,000 is invested in a stock with a beta of 1.8. What is the portfolio's beta? Do not round intermediate calculations. Round your answer to two decimal places. 2. AA Corporation's stock has a beta of 0.8. The risk-free rate is 3%, and the expected return on the market is 11%. What is the required rate of...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT
Active Questions
  • The City of Macon due to the population growth, the city plans to add an oxidation...
    asked 42 seconds ago
  • You are the new accounting manager at the Barry Transport Company. Your CFO has asked you...
    asked 7 minutes ago
  • [6.74] Nutritional intake among Canadian high-performing female athletes—A total of n = 201 elite female athletes...
    asked 11 minutes ago
  • Complete the ANOVA summary table below. In addition, answer the following questions for the ANOVA summary...
    asked 14 minutes ago
  • Using the data below, compute the following predicted values. 70 62.5 69 64.6 64 69.1 71...
    asked 38 minutes ago
  • Given a normal distribution with μ=100 and σ=8​, and given you select a sample of n...
    asked 42 minutes ago
  • Cane Company manufactures two products called Alpha and Beta that sell for $155 and $115, respectively....
    asked 42 minutes ago
  • A 1.50 V battery supplies 0.250 W of power to a small flashlight for 30.0 min....
    asked 1 hour ago
  • Each of the following surveys has bias. Identify the type of bias. Explain why you think...
    asked 1 hour ago
  • How did the authors of the constitution create a balance between federal and state governments and...
    asked 1 hour ago
  • Discuss how differences between the American and British educational systems might have contributed to higher occupational...
    asked 1 hour ago
  • Each datum feature on a part requiring identification must be assigned a different datum identification letter.                        
    asked 1 hour ago