Question: The statistics below show standard deviation, correlation with the market and weights for a portfolio consisting of four securities. SD (s i ) Correlation (r

The statistics below show standard deviation, correlation with the market and weights for a portfolio consisting of four securities.

 SD (si)Correlation (ri,M)Weight
Xero Ltd20%0.7523%
Afterpay Ltd17%0.6037%
REA Group Ltd14%0.5216%
CSK Ltd16%0.6824%
Market13%  
    
Risk Free Rate1.8%  
Market Return8.5%  

REQUIRED

  1. Calculate the betas for each company, and the market.

Step by Step Solution

★★★★★

3.42 Rating (149 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

To calculate the beta for each company we can use the following formu... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Q:

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...

Q:

The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-4. Ivan and Irene paid the following in 2012 (all by check or can otherwise be...

Q:

The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-6. On December 12, Irene purchased the building where her store is located. She paid...

Q:

The rate is = 0.2. Find the mean, variance, standard deviation, coefficient of variation, median, and mode for a random variable T that follows an exponential distribution with the given rate .

Q:

The Wall Street Journal reported the following prices for Microsoft options for trading on Friday, February 7 2010. The stock itself closed at $50.75. 1) If the risk free rate of interest...

Q:

Erin Behlen has a three stock portfolio and is interested in estimating its overall return next year. She has $25,000 invested in Forms Corp., which has a beta of 1.3, $75,000 in Crete Corp. with a...

Q:

Q Magnetic materials is an unlevered firm. Its current beta is 1.2. The expected market rate of return is 15 % and the risk free rate is 8%. MM is considering two other capital structure policies in...

Q:

Draw a diagram showing the variation of an investors profit and loss with the terminal stock price for a portfolio consisting of a. One share and a short position in one call option b. Two shares and...

Q:

Portman Industries just paid a dividend of $2.16 per share. Portman expects dividends to grow by 12% over the next year. The next year, the dividend is expected to grow at a constant rate of 2.4% per...

Q:

Portman Industries just paid a dividend of $2.16 per share. Portman expects dividends to grow by 12% over the next year. The next year, the dividend is expected to grow at a constant rate of 2.4% per...

Q:

Under the UCC, does Egan have a right to reject the fourth shipment? Why or why not? GFI, Inc., a Hong Kong company, makes audio decoder chips, one of the essential components used in the manufacture...

Q:

Question 11 Which of these statements is true about the field of organizational behavior? It examines how individuals and teams in organizations relate to one another and to their counterparts in...

Q:

Operating Leverage and Taxes (LO4) Show that if we consider the effect of taxes, the degree of operating leverage can be written as: Notice that this reduces to our previous result if T = 0. Can you...

Q:

A motorist drives along a straight road at a constant speed of 15.0 m/s. Just as she passes a parked motorcycle police officer, the officer starts to accelerate at 2.00 m/s2 to overtake her. Assuming...

Q:

Model air as a diatomic ideal gas with M # 28.9 g/mol, A cylinder with a piston contains 1.20 kg of air at 25.0C and 200 kPa. Energy is transferred by heat into the system as it is allowed to expand,...

Q:

Metal lids on glass jars can often be loosened by running hot water over them. How is this possible?

Q:

A mercury thermometer is constructed as shown in Figure P19.47. The capillary tube has a diameter of 0.004 00 cm, and the bulb has a diameter of 0.250 cm.

Q:

Markings to indicate length are placed on a steel tape in a room that has a temperature of 22C. Are measurements made with the tape on a day when the temperature is 27C too long, too short, or...

Q:

QUESTION 1 Critically discuss the mechanisms available to policy makers in ensuring ethical conduct and behavior in public management and administration in South Africa...Please provide me with a...

Q:

Suppose you found a house that you want to buy, but you still have to determine what mortgage to use. Bank of Middle Texas has offered a 30-year fixed mortgage that requires you to pay 6.9 percent...

Q:

The Gupta Companys cost of equity is 16 percent. Its before-tax cost of debt is 13 percent, and its marginal tax rate is 40 percent. The stock sells at book value. Using the following balance sheet,...

Q:

Marty Kimble, who retired many years ago after winning a huge lottery jackpot, wants to start a new company that will sell authentic sports memorabilia. He plans to name the company Pro Athlete...

Q:

What is the time interval (in months) separating equivalent payments of $3500.00 and $3439.80 if money is worth 5 % per annum?

Q:

Compare the economic values of $1480 today vs. $1515 in 150 days. Assume money can earn 6.75%. At what rate would the two amounts be equivalent?

Q:

A $5000 payment is scheduled for 120 days from now. If money can earn 7.25%, calculate the payments equivalent value at each of nine different datestoday and every 30 days for the next 240 days.