James purchases 100 shares of ABC at a price of $55 per share, so his total investment in ABC is $5,500 at 8% return. He also buys 100 shares of CDE at $25 per share, so the total investment in CDE is $2,500 with a 14% return. What is the portfolio return? Show work. Reference lecture powerpoint.
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- Suppose you are an investor with a choice between three securities that are identical in every way except in terms of their rates of return and risk. Which investment provides the highest expected return? Investment A: total return= 10% with profitability 50% total return= 20% with profitability 50% Investment B: total return= 12% with profitability 50% total return= 18% with profitability 50% Investment A: total return= 5% with profitability 60%h An investor has $1000 initial wealth for investment and he borrows another $500 at the risk free rate. He then invest the entire total amount of $1500 in the market portfolio. What is his portfolio beta? O 0 +2.0 +1.5 -1.0You are looking to purchase Company A. Your projections for the EBITDA of Company A are as follows: EBITDA $21.51 Year 1 $2.0 O $19.77 $21.78 Your cost of capital is 20%. Your investment banker shows you the EBITDA multiples for the following comparable companies: Company x 5.0x Company y 5.50x Company z 6.0x Year 2 $3.0 Given the above information what is the price that you would like to offer to Company A shareholders? Not enough information Year 3 $3.5 None of the above Year 4 $4.0 Year 5 $5.0
- Sam has her portfolio invested as indicated in the following table. Stock $'s Invested Beta LCAV $150,000 0.50 DFIB $100,000 0.75 GLW $100,000 0.80 DLM $50,000 1.45 Find the beta of Sam's portfolio.What makes for a good investment? Use the approximate yield formula or a financial calculator to rank the following investments according to their expected returns. Buy a stock for $30 a share, hold it for three years, and then sell it for $60 a share (the stock pays annual dividends of $2 a share). Buy a security for $40, hold it for two years, and then sell it for $100 (current income on this security is zero). Buy a one-year, 5 percent note for $1,000 (assume that the note has a $1,000 par value and that it will be held to maturity).An investor is thinking about buying some shares of Health Diagnostics, Inc., at $75 a share. She expects the price of the stock to rise to $115 a share over the next three years. During that time, she also expects to receive annual dividends of $4 per share. Assuming that the investor’s expectations (about the future price of the stock and the dividends that it pays) hold up, what rate of return can the investor expect to earn on this investment? (Hint: Use either the approximate yield formula or a financial calculator to solve this problem.)
- Can you please answer and kindly show detailed human working.An investor has $633,000 to invest in bonds. Bond A yields an average of 8% and the bond B yields 5%. The investor requires that at least 3 times as much money be invested in bond A as in bond B. You must invest in these bonds to maximize his return. This can be set up as a linear programming problem. Introduce the decision variables: ?=dollars invested in bond A ?=dollars invested in bond B Compute ?+? $ ________. Round to the nearest cent.Mr. Scared, a portfolio manager has a P10 million portfolio, which consist of P1 million invested in 10 separate stocks. The portfolio beta is 1.2. The risk free rate is 5% and the market risk premium is 6%. What is the portfolio’s required rate of return? Show all your solutions relating to Mr. Scared's problem by uploading it in the submission bin. Manual computation not in excel.
- Please solve step by step for clarity, thank you!You have $150,000 invested in three stocks as follows: Stock Investment Stock's Beta SYK $50,000 1.9 ISRG $50,000 1.2 YUM $50,000 (a) What is the beta value of your portfolio? (b) You desire a portfolio of 1.15 and will achieve this by selling $25,000 of ISRG and an additional amount SYK, with the proceeds of both sales to purchase YUM. What dollar amount of SYK should you sell? What dollar amount of YUM will you purchase? 0.9You have $21,600 to invest in a stock portfolio. Your choices are Stock X with an expected return of 14.3 percent and Stock Y with an expected return of 8.1 percent. Your goal is to create a portfolio with an expected return of 12.5 percent. All money must be invested. How much will you invest in Stock X? O $15,800 O $18,273 O $14,600 O $15,329 A Moving to another question will save this response. Question 6 of 30> >