Problem 13-11 Calculating Portfolio Betas [LO4] You own a stock portfolio Invested 25 percent In Stock Q, 30 percent In Stock R, 30 percent in Stock S, and 15 percent In Stock T. The betas for these four stocks are .75, 1.13, 1.14, and 1.31, respectively. What is the portfolio beta? (Do not round Intermedlate calculations and round your answer to 2 decimal places, e.g., 32.16.) Portfolio beta
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Raghubhai
![Problem 13-11 Calculating Portfolio Betas [LO4]
You own a stock portfolio Invested 25 percent In Stock Q, 30 percent In Stock R, 30
percent in Stock S, and 15 percent In Stock T. The betas for these four stocks are .75, 1.13,
1.14, and 1.31, respectively. What is the portfolio beta? (Do not round Intermedlate
calculations and round your answer to 2 decimal places, e.g., 32.16.)
Portfolio beta](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb1774fd5-ccd9-46a6-9c5f-f481ab319ac2%2F0650e5f6-def4-4f7d-b531-3810f6a744da%2Fl1x6e1vi_processed.jpeg&w=3840&q=75)
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- Problem 12-7 Stock Betas (LO4, CFA1) You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1.57 and the total portfolio is exactly as risky as the market, what must the beta be for the other stock in your portfolio? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. BetaQuestion 29 Assume the following data for a stock: risk-free rate 5 percent: beta (market) = 1.4; beta (size) - 0.4; beta (book-to- market)-1.1; market risk premium - 13 percent; size risk premium 9.7 percent; and book-to-market risk premium = 11.2 percent. Calculate the expected return on the stock using the Fama-French three-factor model. O 26.5 percent 14.8 percent O 25.1 percent 12.0 percentN3
- 8. Problem 8.02 (Portfolio Beta) A-2 J Ofice eBook An individual has $45,000 invested in a stock with a beta of 0.6 and another $75,000 invested in a stock with a beta of 1.9. If these are the only two investments in her portfolio, what is her portfolio's beta? Do not round intermediate calculations. Round your answer to two decimal places.16 [Question text] What is the beta of the following portfolio? Stock Amount invested (RM) Security beta A 14,200 1.39 B 23,900 0.98 C 8,400 1.52 Select one: A. 1.01 B. 1.05 C. 1.20 D. 1.122. Problem 8.02 (Portfolio Beta) еВook An individual has $45,000 invested in a stock with a beta of 0.5 and another $30,000 invested in a stock with a beta of 2.2. If these are the only investments in her portfolio, what is her portfolio's beta? Do not round intermediate calculations. Round your answer to two decimal places.
- Problem 11 Intro Assume that the CAPM holds. One stock has an expected return of 9% and a beta of 0.5. Another stock has an expected return of 13% and a beta of 1.5. Part 1 What is the expected return on the market? 3+ decimals Submitstions Problem 8.13 (CAPM, Portfolio Risk, and Return) eBook Problem Walk-Through Question 11 of 15▸ Check My Work Consider the following information for stocks A, B, and C. The returns on the three stocks are positively correlated, but they are not perfectly correlated. (That is, each of the correlation coefficients is between 0 and 1.) Stock Expected Return Standard Deviation Beta A 8.50% 16% 0.8 C 9.25 10.75 16 16 1.1 1.7 Fund P has one-third of its funds invested in each of the three stocks. The risk-free rate is 6.5%, and the market is in equilibrium. (That is, required returns equal expected returns.) a. What is the market risk premium (rM - TRF)? Round your answer to one decimal place. % b. What is the beta of Fund P? Do not round intermediate calculations. Round your answer to two decimal places. c. What is the required return of Fund P? Do not round intermediate calculations. Round your answer to two decimal places. % d. What would you expect the standard deviation of Fund P…QUESTION 37 You have developed the following data on three stocks: Stocks Std. Deviation Beta A 0.45 0.60 B 0.60 0.75 C 0.55 1.50 If you are a risk minimizer, you should choose Stock a well-diversified portfolio. if it is to be held in isolation and Stock if it is to be held as part of A; A O B; A C; A O A; C O C; B 3.75 po 13
- Problem 9-9 Consider the following table, which gives a security analyst's expected return on two stocks in two particular scenarios for the rate of return on the market: Market Return Aggressive Stock Defensive Stock 6% -4% 23 37 11 a. What are the betas of the two stocks? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Beta Aggressive stock Defensive stock b. What is the expected rate of return on each stock if the two scenarios for the market return are equally likely to be 6% or 23%? (Do not round intermediate calculations. Round your answers to 1 decimal place.) Expected Rate of Return Aggressive stock % Defensive stock %Problem 11-23 Analyzing a Portfolio You want to create a portfolio equally as risky as the market and you have $1,000,000 to invest. Given this information, fill in the rest of the following table: (Leave no cells blank - be certain to enter "O" wherever required. Do not round intermediate calculations and enter your answers rounded to 2 decimal places, e.g., 32.16.) Asset Stock A Investment Beta $ 195,000 0.80 Stock B $ 365,000 1.09 Stock C | | $ 362,560.18 1.23 Risk-free asset $ 77,439.82 × 0Problem 11-25 Portfolio Returns and Deviations [LO 1, 2] Consider the following information on a portfolio of three stocks: State of Economy Probability of State of Economy Stock A Rate of Return Stock B Rate of Return Stock C Rate of Return Boom .13 .02 .32 .50 Normal .55 .10 .22 .20 Bust .32 .16 −.21 −.35 If your portfolio is invested 40 percent each in A and B and 20 percent in C, what is the portfolio’s expected return, the variance, and the standard deviation? Note: Do not round intermediate calculations. Round your variance answer to 5 decimal places, e.g., .16161. Enter your other answers as a percent rounded to 2 decimal places, e.g., 32.16. If the expected T-bill rate is 4.25 percent, what is the expected risk premium on the portfolio? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.