A portfolio comprises Coke (beta of 1.2) and Wal-Mart (beta of 0.5). The amount invested in Coke is $20,000 and in Wal-Mart is $20,000. What is the beta of the portfolio?

Q: How to construct a portfolio comprising three assets (i.e. Apple, Amazon and treasury bonds) which…

A: Portfolio consist of different stocks in different weights and required rate and risk of portfolio…

Q: You have a portfolio that is invested 17 percent in Stock A, 38 percent in Stock B, and 45 percent…

A: Information for portfolio beta calculation Stock  Weight Beta A 17% 0.62 B 38% 1.17 C 45%…

Q: What is the expected return of a portfolio that has $8,000 invested in S and $2,000 invested in T?…

A: The expected return of the portfolio can be calculated as:E(R_p) = R_f + β_p * (E(R_m) -…

Q: Your estimate of the market risk premium is 5%. The risk-free rate of return is 3%, and General…

A: General Motors has the following given details:Market Risk premium (Rm-Rf) = 5%Risk free rate (Rf)=…

Q: You have just invested in a portfolio of three stocks. The amount of money that you invested in each…

A: As per Capital Assets Pricing Model the expected return is calculated with the help of following…

Q: Expected return of a portfolio using beta. The beta of four stocks-P, Q, R, and S-are 0.60, 0.85,…

A: The CAPM refers to the relationship between the systematic risk faced by the investment and the…

Q: You want to construct a portfolio containing equal amounts of U.S. Treasury bills, stock A, and…

A: Proportion invested in Stock A, Stock B and Treasury Bills are equal that is 1/3 Beta of Stock A is…

Q: Table attached shows the historical returns for Companies A, B and C If one investor has a…

A: The expected return of the stock refers to the profits that the stock provides on average. It is…

Q: You have a portfolio that is equally invested in Stock F with a beta of .95, Stock G with a beta of…

A: Calculation of beta of the portfolio:- The market beta is always equal to one. Portfolio beta = Beta…

Q: The risk free rate currently have a return of 2.5% and the market risk premium is 4.22%. If a firm…

A: Cost of equity refers to the net cost that a business entity bears by raising the capital from the…

Q: You plan to put 50% of your wealth into each assets. What would the expected return be for the…

A: Expected return on a portfolio is the rate of return that is required to generate from the…

Q: You want to create a portfolio equally as risky as the market, and you have $1,500,000 to invest.…

A: Total investment=$15,00,000Investment in A=$3,00,000Investment in B=$22,5000

Q: You have a portfolio that is invested 19 percent in Stock A, 32 percent in Stock B, and 49 percent…

A: Weight of stock A (WA) = 19% or 0.19Weight of stock B (WB) = 32% or 0.32Weight of stock C (WC) = 49%…

Q: A $33,622 portfolio is invested in a risk-free security and two stocks. The beta of Stock A is 2.1…

A: Beta measures a stock's volatility relative to the market; a value of 1 indicates alignment with…

Q: Suppose that the risk-free rate is 3.00% per annum. In addition, assume that the market portfolio…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub- parts…

Q: The current risk-free rate of return (rRf) is 4.67% while the market risk premium is 5.75%. The…

A: According to the CAPM model the cost of equity is the sum of the risk free rate plus the product of…

Q: Stock A has an expected return of 5% and a beta of .7. Stock B has an expected return of 9% and a…

A: Portfolio beta = (Weight of A * Beta of A) + ( Weight of B * Beta of B) Let's assume Weight of B = Y…

Q: EJH has a beta of 1.2, CSH has a beta of 0.6, and KMS has a beta of 1. If you put 25% of your money…

A: In this question, we are required to calculate the beta of the portfolio.

Q: Suppose you have a portfolio of Vestel and Turkcell with a beta of 1.8 and 0.9, respectively. If you…

A: The Answer states the computation of Portfolio Beta by taking the weighted average of individual…

Q: You own a portfolio that has a total value of $195,000 and it is invested in Stock D with a beta of…

A: Part 2: Explanation:Step 1: Calculate the beta of the portfolio:Given that the portfolio's beta is…

Q: A portfolio has 30% invested in stock A and the rest invested in stock B. If stock A has a beta of…

A: In this question, we are required to determine the portfolio beta.

Q: Suppose you have portfolio of four stocks Stock A, B, C and D, Total investment in these stocks is…

A: According to CAPM required rate is equivalent to risk free rate plus market risk premium.

Q: The expected rate of return on a market portfolio is 7 percent. The riskless rate of interest is 4…

A: required rate of return = risk free rate + beta * (market return less risk free rate)

Q: If the return on the risk-free asset is 2.25% (Rf = 2.25%) and the market return is 6.50% (Rm =…

A: Beta shows magnitude of systematic risk related to stock. It shows volatility in stock returns over…

Q: After learning the course, you divide your portfolio into three equal parts (i.e., equal market…

A: So, the beta of your overall portfolio is approximately 0.573.

Q: You want to construct a portfolio containing equal amounts of U.S. Treasury bills, stock A, and…

A: We need to use portfolio beta equation below Portfolio beta =Weight of stock A*Beta of stock A…

Q: Suppose you invest $100, $410, and $640 of your wealth into a stock, the market, and a risk - free…

A: Investment in stock = $100Investment in market = $410Investment in risk-free asset = $640Beta of…

Q: What is the expected return of a portfolio that has $8,000 invested in S and $2,000 invested in T?…

A: Return of Stock S = (0.25 * 30%) + ( 0.5 * 15% )+ (0.25 * -10%) = 7.5 + 7.5 - 2.5 = 12.5 Return of…

Q: 2. Consider two assets, S and B. The expected return on S is 12.2% while the expected return on B is…

A: Expected Return: The anticipated gain or loss from an investment, calculated as the weighted average…

Q: Technology stocks. Pharmaceutical stocks Utility stocks Savings account a. What is the expected…

A: a). Weight of each stock if the investor spends equal amount on each asset = 1/n Where, n is number…

Q: beta and security market line) You own a portiono consisting of the following stocks. The risk-free…

A: A ). Expected return =weighted average return                          = (0.3*19%) + (0.35*13%) +…

Q: (Capital Asset Pricing​ Model)  The expected return for the general market is 10.5 ​percent, and the…

A: The capital asset pricing model is a risk adjusted model which will be helpful in finding out the…

Q: Expected return of a portfolio using beta. The beta of four stocks-P, Q, R, and S-are 0.59, 0.89,…

A: Beta of stock P = Bp = 0.59 Beta of stock Q = Bq = 0.89 Beta of stock R = Br = 1.05 Beta of stock S…

Q: An investor is forming a portfolio by investing $50,000 in stock A which has a beta of 2.40, and…

A: Portfolio beta can be calculated by multiplying the the individual beta with its weight in…

Q: Fremont Enterprises has an expected return of 14% and Laurelhurst News has an expected return of…

A: