The return on US T-Bills is 4% and the risk premium of the S&P 500 is 8%. If a portfolio is equally invested in two stocks with betas of .8 and 2.0, what is the expected return of the portfolio? O 15.2% O 14.8% O 12.8% O 13.6% O 14.2%

Q: What is the expected return of a portfolio with two stocks that has 450 shares of stock A, which has…

A: Step 1: Calculate the Total Value of Each StockFor Stock A:• Number of shares = 450• Price per share…

Q: The return on US T-Bills is 6%, inflation is 3% and the risk premium of the S&P 500 is 12%. If a…

A: The real rate of return can be calculated as per CAPM equation

Q: Suppose Autodesk stock has a beta of 2.30, whereas Costco stock has a beta of 0.68. If the risk-free…

A: Autodesk's beta=2.30 Autodesk's proportion in portfolio=60% Costco's proportion in portfolio=40%…

Q: Your brother has offered to give you either $35,000 today or $70,000 in 11 years. If the interest…

A: Present Value is the current price of future value which will be received in near future at some…

Q: Assume that the risk-free rate is 6.5% and the required return on the market is 10%. What is the…

A: To calculate the required rate of return on a stock, we need to use capital asset pricing model…

Q: Aberdeen Outboard Motors is contemplabing bulding a new plant. The company anticipates that the…

A: 1. Net present value is a capital budgeting technique used for making investment decisions.Net…

Q: Suppose that the risk-free rate of return is 5%, and the expected rate of return on the market…

A: Risk-free rate of return5%Expected return on market portfolio14%Beta of stock X0.8Beta of stock…

Q: Using CAPM A stock has an expected return of 13 percent, the risk-free rate is 4.5 percent, and the…

A: Given details are : Expected return = 13% Risk free rate = 4.5% Market risk premium = 7% We need to…

Q: A stock has an expected return of 10% and a beta of .9. If the risk-free rate is 4%, what is the…

A: The beta of the stock can be calculated as per the CAPM equation

Q: he risk-free rate is 8% and the expected return on a market portfolio is 13%. If a share has a beta…

A: Risk free rate = 8% Market return = 13% Stock beta = 1.20

Q: Suppose that the S&P 500, with a beta of 1.0, has an expected return of 12% and T-bills provide…

A: The objective of the question is to calculate the expected return and beta of portfolios constructed…

Q: Suppose Intel stock has a beta of 0.73, whereas Boeing stock has a beta of 1.3. If the risk-free…

A: As per guidelines we are supposed to answer only 3 sup-parts Expected return on each stock is…

Q: Required Rates of Return Suppose that the risk-free rate is 5% and that the market risk premium is…

A: To calculate the required return we will use the below  formula   Required return = Risk free…

Q: If the T Bill rate is 1.1% and the market risk premium is 10.8%, what is the CAPM-implied expected…

A: Portfolio is a bunch of various assets or investments. Investors invest their funds in various…

Q: Suppose that the S&P 500, with a beta of 1.0, has an expected return of 13% and T-bills provide a…

A: Data given: Two types of assets: i) S&P 500 with expected return = 13% with a beta of 1.0 ii)…

Q: The expected return on stock A is 11.70 percent. The expected return on stock B is 9.40 percent.…

A: The objective of the question is to calculate the risk premium using the Capital Asset Pricing Model…

Q: Suppose Intel stock has a beta of 0.87​, whereas Boeing stock has a beta of 2.08. If the​ risk-free…

A: 1. The expected return of Intel stock, calculated using the Capital Asset Pricing Model (CAPM),…

Q: Suppose Intel stock has a beta of 0.84, whereas Boeing stock has a beta of 1.29. If the risk-free…

A: As per guideline, if more than 3 sub parts asked in a question. I can solve only the first 3…

Q: Consider a stock that has a Beta of 0.85. You expect the long-term return on the market to be 9.75%…

A: CAPM is also known as capital asset pricing model. It helps in know the expected return on the…

Q: The required rate of return on the Daisy Corporationʹs common stock is 11%, the current real rate of…

A: The expected return is the minimum required rate of return which an investor required from the…

Q: Delta Plc is considering investing in bespoke software solutions, which requires an initial…

A:

Q: Suppose Intel stock has a beta of 0.88, whereas Boeing stock has a beta of 1.18. If the risk-free…

A: CAPM stands for capital asset pricing model. This model describes the relationship between expected…

Q: An investor is forming a portfolio by investing $50,000 in stock A that has a beta of 1.50, and…

A: CAPM means capital asset pricing model used for calculating expected returns. It makes use of risk…

Q: Risk free rate is 3%, you predict market expected return to be 11%, beta for stock x is 1.25, beta…

A: Given information: Risk free rate is 3% Expected market return is 11% Beta of stock X is 1.25, Beta…

Q: a. What would be the expected return and beta of portfolios constructed from these two assets with…

A: Information Provided: Beta = 1.0 Expected return = 11% T-bill risk-free return = 6%   Expected…

Q: Compute the CAPM alpha of ABC. % Compute the volatility of the idiosyncratic component of return of…

A: The alpha indicates how well an investment performs in relation to expectations. An investment…

Q: Consider the CAPM. The expected return on the market is 18%. The expected return on a stock with a…

A: We are given following details : Expected return on market = 18% Beta = 1.2 Expected return on stock…

Q: Stock Y has an expected excess return of 10% and its beta is 1.25. The Market portfolio expected…

A: Alpha measures the excess return of an investment compared to what would be expected given its risk,…

Q: Suppose intel stock has a beta of 0.80, whereas Boeing stock has a beta of 1.15. If the risk-free…

A: Intel Beta = ib = 0.89 Boeing Beta = bb = 1.15 Risk free rate = rf = 3.1% Market return = rm = 10.1%

Q: Company Y has a beta of 1.09. The risk-free rate of return is 3.18% and the market rate of return is…

A: β=1.09Rf =3.18%Rm=11.27%

Q: You expect the risk-free rate to be 4 percent and the market return to be 10 percent. You also have…

A: According to the capital asset pricing model (CAPM), the required return is the return that is…

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: The risk-free return is 4.43%, the inflation rate is 3.29%, and the expected return on the market is…

A:

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: If the interest rate on T Bills is 2% and the market risk premium is 6%, what is the CAPM-implied…

A: interest rate on T-bills or risk free rate is 2% Market risk premium is 6% Beta is 1.25   To Find:…

Q: A stock has a beta of​ 1.3, and a market risk premium of​ 8%. The​ risk-free rate is​ 4%. What is…

A: The objective of this question is to calculate the expected return on a stock given its beta, the…

Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.