1. Billy Football Sports has a total investment of $500 million in five companies: Company Investment ($MM)...
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1. Billy Football Sports has a total investment of $500 million in five companies:
Company | Investment ($MM) | Beta |
A | 130 | 0.3 |
B | 160 | 1.5 |
C | 70 | 3.2 |
D | 90 | 2.0 |
E | 50 | 1.0 |
Total | 500 |
a) What is the beta of this portfolio?
b) Interpret the beta you just calculated.
2. You have discovered that when the required rate of return on a bond you own fell by 0.5 percent from 8.3 percent to 7.8 percent, the fair present value rose from $955 to $975. The bond pays interest annually. What is the duration of this bond? Assume annual payments. (Do not round intermediate calculations. Round your answer to 1 decimal place. (e.g. 32.1)) Duration of this bond I years
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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