SHARE PERCENTAGE OF BETA EXPECTED RETURN (%) PORTFOLIO ABSA 40 1.00 12 FNB 25 0.75 11...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
SHARE PERCENTAGE OF BETA EXPECTED RETURN (%) PORTFOLIO ABSA 40 1.00 12 FNB 25 0.75 11 CAPITEC 35 1.30 15 Required: 2.1 Determine the expected return of the entire portfolio that are listed above 2.2 Determine the beta of the entire portfolio listed above 2.3 Given the information provided above, you are required to determine whether the three banks are (5) (5) overpriced, fairly or overpaid based on the information provided. Assume the risk- free rate is 8% and that the expected return on the market portfolio is 12%. (15) SHARE PERCENTAGE OF BETA EXPECTED RETURN (%) PORTFOLIO ABSA 40 1.00 12 FNB 25 0.75 11 CAPITEC 35 1.30 15 Required: 2.1 Determine the expected return of the entire portfolio that are listed above 2.2 Determine the beta of the entire portfolio listed above 2.3 Given the information provided above, you are required to determine whether the three banks are (5) (5) overpriced, fairly or overpaid based on the information provided. Assume the risk- free rate is 8% and that the expected return on the market portfolio is 12%. (15)
Expert Answer:
Answer rating: 100% (QA)
Answer a Determination of Expected return of the entire Portfolio Expected Return of entire Portfoli... View the full answer
Posted Date:
Students also viewed these general management questions
-
Assume a risk free rate is 4%, an asset return estimate of 10% and the value of standard deviation of estimated return of 12%. What is the slope of the assets CML (Capital Market Line)?
-
Assume that the risk free rate is 6% and the market risk premium is 5%. Given this information, which of the following statements is correct? A. If a stocks beta doubles, its required return must...
-
Suppose beta is 1.2, risk free rate is 1%, market risk premium is 4%, before tax cost of debt is 30%, tax rate is 20%, and the firm's debt to equity is 70%, what is WACC?
-
Assume that on July 1, 2014, Big Corp. loaned little Corp. $12,000 for aperiod of one year at 6percent interest. What amount of interest revenue will big report for 2014? What amount of cash will big...
-
A deposit of $750 earns interest rates of 9 percent in the first year and 12 percent in the second year. What would be the second year future value?
-
A stock with a current price $82 has a call option available with a strike price of $80. The stock will move up by a factor of 1.14 or down by a factor of .88 each period for the next two periods and...
-
Carton Captain manufactures cartons. It expects to sell 350,000 cartons in 2012. The company has enough beginning inventory of direct materials on hand to make 50,000 cartons. The company has 40,000...
-
The Enron debacle created what one public official reported was a crisis of confidence on the part of the public in the accounting profession. List the parties who you believe were most responsible...
-
8 United Research Associates (URA) had received a contract to produce two units of a new cruise missile guidance control. The first unit took 4,000 hours to complete and cost $40,000 in materials and...
-
1. a. How much did the materials cost per unit change between June and July? b. How much did the conversion cost per unit change between June and July? 2. Which is the optimal choice of material and...
-
Computing consolidated earnings per share (EPS) Assume the following facts about a parent and its 75% owned subsidiary company: a. Compute basic earnings per share b. Compute diluted earnings per...
-
You have just joined an organisation that has been in the headlines for product recalls. This has cost the organisation in terms of revenue losses and loss of credibility with its customers. The...
-
Sherrie is a support worker and the organisation she works for provides physical assistance to children living with a disability. As part of Sherries role she must comply with the ethical and legal...
-
Identify ten stakeholders connected with the organisation and evaluate their expectations. Undertake stakeholder mapping to analyse the power and influence they have upon the organisational strategy.
-
Part A: "Many college students don't consider retirement plans or investment opportunities because they don't like to think that far into the future." With reference to the above statement, answer...
-
Identify a barrier to employee engagement within an organisation that would also be common to other organisations and explain how it affects employee engagement. The write up must be clear in...
-
The Fantasy Gifts Company, a maker of Holiday novelties, needs your help immediately. The company's accountant resigned without leaving adequate records or explanations for what she did. In reviewing...
-
SBS Company have received a contract to supply its product to a Health Care Service Hospital. The sales involve supplying 1,250 units every quarter, the sales price is RM 85 per unit. The Client...
-
Oswego Corporation reported net income $24,000; net sales $400.000; and average assets \($600,000\) for 2002. What is the 2002 profit margin? (a) 6%. (b) 12%. (c) 40%. (d) 200%.
-
Which measure is an evaluation of a company's ability to pay current liabilities? (a) Acid-test ratio. (b) Current ratio. (c) Both (a) and (b). (d) None of the above.
-
Which of the following is generally not considered to be a limitation of financial analysis? (a) Use of ratio analysis. (b) Use of estimates. (c) Use of cost. (d) Use of alternative account- ing...
Study smarter with the SolutionInn App