Assume that you hold a well-diversified portfolio that has an expected return of 11.0% and a...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Assume that you hold a well-diversified portfolio that has an expected return of 11.0% and a beta of 1.20. You are in the process of buying 1,000 shares of Alpha Corp at $10 a share and adding it to your portfolio. Alpha has an expected return of 22.5% and a beta of 1.20. The total value of your current portfolio is $90,000. What will the expected return and beta on the portfolio be after the purchase of the Alpha stock? Do not round your intermediate calculations. O 11.42%; 1.04 O 15.07%; 1.33 12.15%; 1.20 - O 11.54%; 1.26 13.97%; 0.97 Assume that you hold a well-diversified portfolio that has an expected return of 11.0% and a beta of 1.20. You are in the process of buying 1,000 shares of Alpha Corp at $10 a share and adding it to your portfolio. Alpha has an expected return of 22.5% and a beta of 1.20. The total value of your current portfolio is $90,000. What will the expected return and beta on the portfolio be after the purchase of the Alpha stock? Do not round your intermediate calculations. O 11.42%; 1.04 O 15.07%; 1.33 12.15%; 1.20 - O 11.54%; 1.26 13.97%; 0.97
Expert Answer:
Posted Date:
Students also viewed these finance questions
-
Given the financial data in the table below for two mutually exclusive alternatives, determine the value "X" for the two alternatives to be equally attractive. Use an interest rate of 12% per year. P...
-
Find RAB in the network in figure. ww- 6 kn 6 kN 2 kn RAB 6 B
-
Below are financial statements for Eastnorth Manufacturing. After computing the ratios we discussed in this chapter, discuss strong and weak points of Eastnorths performance. December 31 2017 2016...
-
Discuss some of the consequences you believe might follow from the shift in UK share ownership over the past 30 years.
-
Roll Corporation (RC) currently has 330,000 shares of stock outstanding that sell for $64 per share. Assuming no market imperfections or tax effects exist, what will the share price be after? a. RC...
-
Use the information provided below to answer the following questions independently: 3.2.1 If Kempster Limited decides on a profit objective of R400 000, calculate the target sales volume. (4 marks)...
-
For a retail investor who would like to participate in the stock market, does it matter whether they choose to hold an ETF or a mutual index fund? What drives the decision when choosing between the...
-
READ: http://www.nytimes.com/2013/06/22/dining/paula-deen-is-a-no-show-on-today.html http://www.nytimes.com/2013/06/22/dining/paula-deen-is-a-no-show-on-today.html...
-
The partners of Mayfair CPAs are meeting to discuss the upcoming audit of an ongoing, major audit client. The client has recently replaced some key executive positions, as due to an economic...
-
Rick thinks that US dollar will continue to depreciate relative to other major currencies. He believes that Japanese Yen will be a good currency to hedge the risk. The exchange rate is $0.0091 per...
-
Describe at least four (4) factors that affect the decision-making process through collegial contact between judges. Provide a rationale for your response. Describe the effects of the collegial...
-
SECTION I Question 1 Make the double entries, enter the following accounting transactions in the relevant accounts and prepare the trial balance. (a) Mr Rouvas contributed 100,000 in cash to the...
-
Number 11.47 and 11.48. Please help me 11.46. Repeat Problem 11.45 if the pressure gradient is from a high-pressure region. 11.47. Repeat Problem 11.45 if the latitude is 40N and the pressure...
-
In the series connection below, what are the respective power consumptions of R, R2, and R3? R R www 4 V=6V P1-3 W; P2=3W; and P3= 3 W OP10.5 W; P2-1 W; and P3= 1.5 W P1=1.5 W; P2=1 W; and P3= 0.5 W...
-
Consider the Bayesian model for \(\tau=\left\{x_{1}, \ldots, x_{n} ight\}\) with likelihood \(g(\tau \mid \mu)\) such that \(\left(X_{1}, \ldots, X_{n} \mid \mu ight) \sim_{\text {idd }}...
-
Consider the sequence \(w_{0}, w_{1}, \ldots\),where \(w_{0}=g(\boldsymbol{\theta})\) is a non-degenerate initial guess and \(w_{t}(\boldsymbol{\theta}) \propto w_{t-1}(\boldsymbol{\theta}) g(\tau...
-
Let \(X \sim \operatorname{Gamma}(\alpha, \lambda)\). Show that the pdf of \(Z=1 / X\) is equal to \[ \frac{\lambda^{\alpha}(z)^{-\alpha-1} \mathrm{e}^{-\lambda(z)-1}}{\Gamma(\alpha)}, \quad z>0 \]
Study smarter with the SolutionInn App