An investor obtains the following CAPM beta values for a set of UK stocks: Share Beta value Share Beta value Barlow plc 0.1 Evermore plc 1.6 Cardy plc -0.2 Franklin plc 0.4 Davies plc 1.1 Gardener plc 0.8 The UK risk free rate of interest is 1%. (i) Calculate the beta value of a portfolio consisting of £100 each in Barlow, Cardy and Davies, and£400 each in Evermore, Franklin and Gardener.
An investor obtains the following CAPM beta values for a set of UK stocks: Share Beta value Share Beta value Barlow plc 0.1 Evermore plc 1.6 Cardy plc -0.2 Franklin plc 0.4 Davies plc 1.1 Gardener plc 0.8 The UK risk free rate of interest is 1%. (i) Calculate the beta value of a portfolio consisting of £100 each in Barlow, Cardy and Davies, and£400 each in Evermore, Franklin and Gardener.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
An investor obtains the following
Share Beta value Share Beta value
Barlow plc 0.1 Evermore plc 1.6
Cardy plc -0.2 Franklin plc 0.4
Davies plc 1.1 Gardener plc 0.8
The UK risk free rate of interest is 1%.
(i) Calculate the beta value of a portfolio consisting of £100 each in Barlow, Cardy and Davies, and£400 each in Evermore, Franklin and Gardener.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education