The risk free rate is 12.5% and the market retum is 17%. A B 1,575 2,890...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The risk free rate is 12.5% and the market retum is 17%. A B 1,575 2,890 20.3% 14.7% STOCK AMOUNT (GHC) EXPECTED RETURN BETA C 3,079 17.8% 1.40 0.60 -0.90 (a) Calculate the expected return of a portfolio made up of all stocks A, B, C and D. (b) Compute the required return for each stock, using the capital asset pricing model (CAPM (c) Compute the portfolio required return. D 2,105 15.5% 1.90 The risk free rate is 12.5% and the market retum is 17%. A B 1,575 2,890 20.3% 14.7% STOCK AMOUNT (GHC) EXPECTED RETURN BETA C 3,079 17.8% 1.40 0.60 -0.90 (a) Calculate the expected return of a portfolio made up of all stocks A, B, C and D. (b) Compute the required return for each stock, using the capital asset pricing model (CAPM (c) Compute the portfolio required return. D 2,105 15.5% 1.90
Expert Answer:
Answer rating: 100% (QA)
To calculate the expected return of a portfolio made up of stocks A B C and D we need to consider the weights of each stock in the portfolio and their ... View the full answer
Related Book For
Posted Date:
Students also viewed these finance questions
-
KYC's stock price can go up by 15 percent every year, or down by 10 percent. Both outcomes are equally likely. The risk free rate is 5 percent, and the current stock price of KYC is 100. (a) Price a...
-
Using CAPM: A stock has a of 1.2. The equity risk premium is 6 percent and the risk free rate is 2 percent. What is the rate of return required by investors in the stock? Question 2 4.1.b - using...
-
The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-5. Ivan's grandfather died and left a portfolio of municipal bonds. In 2012, they pay Ivan...
-
Question 4: Artistic Hand for engineering Services was formed on Jun 1, 2018. The following transactions took place during the month of Jun: I The owner invested $20,000 cash in business. 2 Hired an...
-
Consider a single-slit diffraction pattern. The center of the central maximum, where the intensity is I0, is located at = 0. (a) Let + and _ be the two angles on either side of = 0 for which I = I0....
-
The risk that an auditor will conclude, based on audit tests, that a material misstatement does not exist in an account balance when, in fact, such misstatement does exist is referred to as a....
-
On November 15, 2010, Chandlers Department Store purchased $5,100 of inventory on account from one of its suppliers. The terms were 3/15, n/45, FOB shipping point. On November 18 Chandlers Department...
-
Using either Skechers USA, Inc. most current Form 10-K or the companys annual report, answer the questions below. To obtain the Form 10-K use either the EDGAR system following the instructions in...
-
In the face of intense competition, the management team of Luxe Fashion House are interested in undertaking research to improve their brand image, so that they could position their brand more...
-
You are a security analyst responsible for following Jaguar's stock after it floats. (Assume the company had 100 million shares outstanding.) What is your estimate of Jaguar's stock price given a 10%...
-
Find and review the Twitter accounts of three reporters: One from a national news organization (CNN, New York Times, Washington Post, etc.) One from a regional/local news organization (Centre Daily...
-
Discuss ethical issues association with creating strong AI machines. Should they be treated differently than machines without strong AI? Better or worse than animals? Better or worse than humans?
-
How have political and economic changes since the end of World War II affected cultures around the world?
-
Using an Internet search engine, find information about the fourth industrial revolution. What are the characteristics of an industrial revolution? What were the first three industrial revolutions,...
-
Describe the roles of conflict and consensus in culture change.
-
Evaluate the significance of population growth and the effects of government policy and economics in controlling population growth.
-
,Find the reactance power Q . Example E1 E = 100 10 V E = 100 230 Z 2 = 5j 2 Find the reactance power Q E2
-
CdF2 (s) Cd+ (aq) + 2 F- (aq) 1. A saturated solution of CdF2 is prepared. The equilibrium in the solution is represented above. In the solution [Cd+] eq = 0.0585 M and [F-] eq = 0.117 M. a....
-
Distinguish between YTM and RCY. How does interest on interest affect the RCY?
-
Assume the annual price data below is for General Foods and the S&P 500, covering the period 19972012. Calculate the beta for General Foods. Use the ESTLIN function or the SLOPE function in the...
-
Assume a 7 percent; 8-year bond has Macaulay duration of 5.6 years and a YTM of 6.5 percent. Calculate the approximate price change for this bond if interest rates decline 110 basis points.
-
Using the Newmark method with \(\alpha=\frac{1}{6}\) and \(\beta=\frac{1}{2}\), solve Problem 11.20. Data From Problem 11.20:- The equations of motion of a two-degree-of-freedom system are given by...
-
Using MATLAB function ode23, solve the differential equation \(5 \ddot{x}+4 \dot{x}+3 x=6 \sin t\) with \(x(0)=\dot{x}(0)=0\).
-
Find the response of a simple pendulum numerically by solving the nonlinear equation: \[\ddot{\theta}+\frac{g}{l}\left(\theta-\frac{\theta^{3}}{6} ight)=0\] with \(\frac{g}{l}=0.01\) and plot the...
Study smarter with the SolutionInn App