Suppose you invested in the following three stocks and their corresponding Betas are as follows: Stocks Invested amount Beta Pfizer $9,038 1.56 Uber $2,194 0.83 Twitter $9,052 1.37 What is the beta of your portfolio (all investments)? (Round your answer to 2 decimal point)

Suppose you invested in the following three stocks and their corresponding Betas are as follows: Stocks Invested amount Beta Pfizer $9,038 1.56 Uber $2,194 0.83 Twitter $9,052 1.37 What is the beta of your portfolio (all investments)? (Round your answer to 2 decimal point)

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

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Similar questions

The market and Stock J have the following probability distributions: Probability rM rJ 0.3 15.00 % 19.00 % 0.4 10.00 6.00 0.3 18.00 10.00 The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet Calculate the expected rate of return for the market. Do not round intermediate calculations. Round your answer to two decimal places.fill in the blank %Calculate the expected rate of return for Stock J. Do not round intermediate calculations. Round your answer to two decimal places.fill in the blank % Calculate the standard deviation for the market. Do not round intermediate calculations. Round your answer to two decimal places.fill in the blank %Calculate the standard deviation for Stock J. Do not round intermediate calculations. Round your answer to two decimal places.fill in the blank %
(Security market line) You are considering the construction of a portfolio comprised of equal investments in each of four different stocks. The betas for each stock are found below Asset A Beta 2.30 B C D 0.80 0.60 -1.60 (Click on the icon in order to copy its contents into a spreadsheet.) a. What is the portfolio beta for your proposed investment portfolio? b. How would a 25 percent increase in the expected return on the market impact the expected return of your portfolio? c. How would a 25 percent decrease in the expected return on the market impact the expected return on each asset? d. If you are interested in decreasing the beta of your portfolio by changing your portfolio allocation in two stocks, which stock would you decrease and which would you increase? Why? a. The portfolio beta for your proposed investment portfolio is (Round to three decimal places)
8.2 An individual has $20,000 invested in a stock with a beta of 0.8 and another $55,000 invested in a stock with a beta of 1.8. 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.
Assume that most of the investors in the stock market are active in an online chat group.As one of the investors holding ABC shares, you find out that the ABC stock has an expected return of 9.8% from the perspective of most investors in the chat group.In addition, you gathered the following information by carrying out market research. In your research, the market return is 6.8% and the risk-free rate is estimated to be 3%. The beta and past 1-month variance of Stock ABC is 1.2 and 7.8% respectively. The stock price exhibits an upward trend last week. Should you buy or sell Stock ABC if CAPM is correct? Why?
Stocks A and B have the following historical returns: Year Stock A's Returns, rA Stock B's Returns, rA 2014 (19.00 (14.70 %) 2015 34.75 19.50 2016 13.75 30.90 2017 (4.25 (9.30 ) 2018 34.25 33.10 Calculate the coefficient of variation for each stock and for the portfolio. Round your answers to two decimal places. Stock A Stock B Portfolio CV Assuming you are a risk-averse investor, would you prefer to hold Stock A, Stock B, or the portfolio?
onsider the following table, which gives a security analyst’s expected return on two stocks and the market index in two scenarios: Scenario Probability Market Return Aggressive Stock Defensive Stock 1 0.5 7% 2.2% 5.0% 2 0.5 15 25 12 Required: a. What are the betas of the two stocks? (Round your answers to 2 decimal places.) b. What is the expected rate of return on each stock? (Round your answers to 2 decimal places.)
You decide to form a portfolio of the following amounts invested in the following stocks. What is the expected return of the portfolio? SET YOUR CALCULATOR TO 4 DECIMAL PLACES THEN INPUT THE NUMBER AS PERCENTAGE ROUNDING TO 2 DECIMALS. DO NOT ENTER THE % SYMBOL..i.e. if your answer is 7.7711%, enter it as 7.77. Stock Apple Microsoft Ford Time Warner Amount Beta Expected Return $1,125 2.40 10.50% $4,649 0.73 16.90% $9,502 1.95 15.75% $1,831 1.27 11.80%
Consider the following information: State Probability Stock A Stock B Stock C Boom 0.32 0.09 -0.01 0.01 Bust 0.68 -0.05 0.28 0.03 What is the expected return of a portfolio that has invested $9,981 in Stock A, $6,817 in Stock B, and $2,123 in Stock C? (Hint: calculate weights of each stock first). Enter the answer with 4 decimals (e.g. 0.1234).
Please show working Please answer ALL OF QUESTIONS 1 AND 2A and 2B 1. Stock R has a beta of 1.2, Stock S has a beta of 0.35, the required return on an average stock is 9%, and the risk-free rate of return is 5%. By how much does the required return on the riskier stock exceed the required return on the less risky stock? Round your answer to two decimal places. 2. Harrimon Industries bonds have 6 years left to maturity. Interest is paid annually, and the bonds have a $1,000 par value and a coupon rate of 8%. a. What is the yield to maturity at a current market price of: $759? Round your answer to two decimal places. ________% $1,083? Round your answer to two decimal places. _________% b. Would you pay $759 for each bond if you thought that a "fair" market interest rate for such bonds was 13%-that is, if rd = 13%? You would not buy the bond as long as the yield to maturity at this price is less than the coupon rate on the bond. You would buy the bond as long as the yield…
Give typing answer with explanation and conclusion
After learning the course, you divide your portfolio into three equal parts (i.e., equal market value weights), with one part in Treasury bills, one part in a market index, and one part in a mutual fund with beta of 1.11. What is the beta of your overall portfolio?
Please complete in Excel (and show work): If returns of S&P 500 stocks are normally distributed, what range of returns would you expect to see 95% of the time? Base your answer on Figures 11.3 (left) and 11.4 (right).

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