You own the portfolio of five stocks shown below. Given the amount owned of each stock and
Question:
You own the portfolio of five stocks shown below. Given the amount owned of each stock and their respective betas, what is the beta of your portfolio? If the market return is expected to be 9.5 percent and the risk-free rate is 2 percent, what is the required rate of return for the portfolio?
A B Value 1 2 Human Genome $7,000 3 Frozen Food Express $8,500 $4,200 4 Molecular Devices Pandemic Busters 5 6 Zoom Technologies 7 $6,600 $11,500 C Beta 0.94 1.34 1.22 1.27 0.57 D E Portfolio $ $37,800 F Weight 18.52% =B2/$E$7 22.49% 11.11% 17.46% 30.42% G
Step by Step Answer:
C Beta 1 2 Human Genome 094 134 3 Frozen Food Express 4 Mol...View the full answer
Finance Applications And Theory
ISBN: 9781264101580
6th Edition
Authors: Marcia Cornett, Troy Adair, John Nofsinger
Related Video
Stocks (also known as equities) are securities that represent ownership in a company. They are issued by companies to raise capital, and when an individual buys stocks, they become a shareholder in that company. Investing in stocks can be a way for individuals to potentially earn a return on their investment through dividends and capital appreciation. However, investing in stocks also carries a level of risk, as the value of the stock can fluctuate based on various factors such as the financial performance of the company and general market conditions. For companies, issuing stocks can be a way to raise funds for growth and expansion. When a company goes public by issuing an initial public offering (IPO), it can raise significant capital by selling ownership stakes to the public. Companies can also issue additional stock offerings to raise additional capital as needed.
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