3. Portfolio risk and return Emma holds a $10,000 portfolio that consists of four stocks. Her...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
3. Portfolio risk and return Emma holds a $10,000 portfolio that consists of four stocks. Her investment in each stock, as well as each stock's beta, is listed in the following table: Stock Investment Beta Standard Deviation Perpetualcold Refrigeration Co. (PRC) $3,500 0.80 9.00% Zaxatti Enterprises (ZE) $2,000 1.50 12.00% Water and Power Co. (WPC) $1,500 1.20 16.00% Flitcom Corp. (FC) $3,000 0.30 22,50% Suppose all stocks in Emma's portfolio were equally weighted. Which of these stocks would contribute the least market risk to the portfolio? Zaxatti Enterprises Perpetualcold Refrigeration Co. Flitcom Corp. Water and Power Co. Suppose all stocks in the portfolio were equally weighted. Which of these stocks would have the least amount of stand-alone risk? O Fitcom Corp. Perpetualcold Refrigeration Co. O Water and Power Co. O Zaxatti Enterprises If the risk-free rate is 7% and the market risk premium is 8.5%, what is Emma's portfolio's beta and required return? Fill in the following table: Beta Required Return Emma's portfolo Grade It Now Save & Continue Continue without saving 3. Portfolio risk and return Emma holds a $10,000 portfolio that consists of four stocks. Her investment in each stock, as well as each stock's beta, is listed in the following table: Stock Investment Beta Standard Deviation Perpetualcold Refrigeration Co. (PRC) $3,500 0.80 9.00% Zaxatti Enterprises (ZE) $2,000 1.50 12.00% Water and Power Co. (WPC) $1,500 1.20 16.00% Flitcom Corp. (FC) $3,000 0.30 22,50% Suppose all stocks in Emma's portfolio were equally weighted. Which of these stocks would contribute the least market risk to the portfolio? Zaxatti Enterprises Perpetualcold Refrigeration Co. Flitcom Corp. Water and Power Co. Suppose all stocks in the portfolio were equally weighted. Which of these stocks would have the least amount of stand-alone risk? O Fitcom Corp. Perpetualcold Refrigeration Co. O Water and Power Co. O Zaxatti Enterprises If the risk-free rate is 7% and the market risk premium is 8.5%, what is Emma's portfolio's beta and required return? Fill in the following table: Beta Required Return Emma's portfolo Grade It Now Save & Continue Continue without saving
Expert Answer:
Answer rating: 100% (QA)
B D E Stock Market value Weights in portfolio Beta Weighted beta 23 24 PRC 3500 03500 080 028 2... View the full answer
Related Book For
Numerical Methods for Engineers
ISBN: 9780071244299
5th Edition
Authors: Steven C. Chapra, Raymond P. Canale
Posted Date:
Students also viewed these accounting questions
-
The data listed in the following table gives hourly measurements of heat flux q (cal/cm2/h) at the surface of a solar collector. As an architectural engineer, you must estimate the total heat...
-
The data set listed in the following table contains information on AGE, SEX (1 = male, 2 = female), work problems index (WP), marital conflict index (MC), and depression index (DEP) for a sample of...
-
The data listed in the following table are from a study by Benignus and others (1981). Blood and brain levels of toluene (a commonly used solvent) were measured in rats following a 3-hour inhalation...
-
Write code in MATLAB (Radionuclide) (half-life) U-238 4.468 x 10 years U-235 703.8 x 10 years Mo-99 67 hours Tc-99m 6.04 hours Given the formula, where is the decay constant used in , calculate the...
-
Julia has recently undergone a severe career crisis. After nearly ten years as a professional engineer, her position was phased out by her company due to a loss of government contracts, and she has...
-
Suppose that China and Germany each have 1,000,000 labour hours available for the pro- duction of cell phones and computers. The number of labour hours needed to produce cell phones and computers in...
-
Now compute the biased estimates for the data in Question 4. Data From Question 4 4. For the following set of achievement scores, compute the unbi- ased standard deviation and variance. (Hint: Use...
-
Brubaker Inc., a manufacturer of high-sugar, low-sodium, low-cholesterol frozen dinners, would like to increase its market share in the Sunbelt. In order to do so, Brubaker has decided to locate a...
-
Medication with strength 125 mg/5 mL has been ordered at 10 mg/kg. The patient weighs 101 lb. How much should be administered? (If less than 1, round to the nearest hundredth; otherwise, round to the...
-
Jackie Wengler, owner of Wengler Home Decorating Service, has requested that you prepare from the following balances (a) An income statement for June 201X, (b) A statement of owner?s equity for June,...
-
What are Indonesians government regulations?
-
Find a recent copy of your resume. Does it demonstrate the professional development steps you've taken? If so, where? If not, what can you add, and where would you add this information?
-
Write a program that prompts a user to enter the name of a file and a word. The program should then count all occurrences of the word in the file and display the number of occurrences. Use a utility...
-
A company has the following results for the year to 31 March 2018: Trading profits, after capital allowances Bank deposit interest (account opened 1 April 2017): Received 30 June 2017 Received 31...
-
Develop a program to store names in a one-dimensional array. The program should initially create a one-dimensional array which holds ten String values. As the user enters names one by one, each name...
-
How are first, second and percentage differences used to determine a model?
-
What is the theoretical electric field around a charged particle? What is the theoretical electric field around a line of charge with a charge density of C/m? (Use Gauss' law if necessary to obtain...
-
On October 1, 2021, Adoll Company acquired 2,600 shares of its $1 par value stock for $38 per share and held these shares in treasury. On March 1, 2023, Adoll resold all the treasury shares for $34...
-
A simply supported beam is loaded as shown in Figure. Using singularity functions, the shear along the beam can be expressed by the equation : V (x) = 20[(x ? 0) 1 ? (x ? 5) 1 ] ? 15 (x ? 8) 0 ? 57...
-
Develop a user-friendly program for the Newton-Raphson method based on Figure and sec. 6.2.3. Test it by duplicating the computation from Example 6.3.
-
Consider the following system with three unknowns , u, and : u2 2v2 = a2 u + v = 2 a2 2a u = 0 Solve for the real values of the unknown using: (a) The Excel Solver and (b) A symbolic manipulator...
-
Consider the differential equation of motion for the free vibration of a damped single-degreeof-freedom system given by Show that Eq. (E.1) remains the same irrespective of the units used by...
-
Derive an expression for the time at which the response of a critically damped system will attain its maximum value. Also find the expression for the maximum response.
-
A shock absorber is to be designed to limit its overshoot to \(15 \%\) of its initial displacement when released. Find the damping ratio \(\zeta_{0}\) required. What will be the overshoot if...
Study smarter with the SolutionInn App