You hold the positions in the table below. Portfolio Beta Required return Price $48.00 29.00 76.00 33.00 % Shares 175 179 155 309 Amazon.com Family Dollar Stores McKesson Corporation Schering-Plough Corporation. What is the beta of your portfolio? If you expect the market to earn 14.60 percent and the risk-free rate is 4.20 percent, what is the required return of the portfolio? Note: Do not round intermediate calculations and round your final answers to 2 decimal places. Beta 4.06 2.20 0.62 1.22

You hold the positions in the table below. Portfolio Beta Required return Price $48.00 29.00 76.00 33.00 % Shares 175 179 155 309 Amazon.com Family Dollar Stores McKesson Corporation Schering-Plough Corporation. What is the beta of your portfolio? If you expect the market to earn 14.60 percent and the risk-free rate is 4.20 percent, what is the required return of the portfolio? Note: Do not round intermediate calculations and round your final answers to 2 decimal places. Beta 4.06 2.20 0.62 1.22

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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The risk-free rate is 3%, the market risk premium (MRP) is 8%, and the Beta of Lotsa Dough common stock is 0.9. What is LotsaDough's cost of common equity using the SML/CAPM approach? Group of answer choices 7.5% 10.2% 13.7% 15.1%
The following shows beta for several companies. Calculate each stock’s expected rate ofreturn using CAPM, assuming the risk free rate is 4% and the risk premium for the marketportfolio is 7%. What is your portfolio beta if you construct an equally weighted portfolio using allstocks? What can you say about this portfolio relative to the market?Stock BetaApple 1.35Johnson & Johnson 0.69IBM 1.10
Suppose you observe the following situation: Security Pete Corporation Repete Company Beta 1.25 .87 Expected Return 1080 .0820 a. Assume these securities are correctly priced. Based on the CAPM, what is the expected return on the market? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the risk-free rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Expected return on market using Pete Corporation a. Expected return on market using Repete Company b. Risk-free rate de de % % %
Consider the following multifactor (APT) model of security returns for a particular stock. Factor Risk Premium 8% 9 7 Factor Inflation Industrial production Oil prices Factor Beta 1.1 0.6 0.3 a. If T-bills currently offer a 7% yield, find the expected rate of return on this stock if the market views the stock as fairly priced. (Do not round intermediate calculations. Round your answer to 1 decimal place.) X Answer is complete but not entirely correct. Expected rate of return 19.0 X %
Fiske Roofing Supplies' stock has a beta of 1.23, its required return is 10.00%, and the risk-free rate is 4.30%. What is the required rate of return on the market? (Hint: First find the market risk premium.) Select the correct answer. a. 8.93% b. 8.69% c. 8.77% d. 8.85% e. 9.01%
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%
Suppose you observe the following situation: Security Beta Expected Return Pete Corp. 1.70 0.180 Repete Co. 1.39 0.153 What is the risk - free rate? (Do not round intermediate calculations. Round the final answer to 3 decimal places.) Risk - free rate % Assume these securities are correctly priced. Based on the CAPM, what is the expected return on the market? (Do not round intermediate calculations. Round the final answers to 2 decimal places.) Expected Return on Market Pete Corp. % Repete Co. %
Currently the risk-free rate equals 5% and the expected return on the market portfolio equals 11%. An investment analyst provides you with the following information: Stock A Beta 1.33 Expected Return 12% Stock B Beta 0.7 Expected Return 10% (a) Calculate the reward-to-risk ratios of stock A, stock B and in market equilibrium. Are stock A and stock B overvalued, undervalued or fairly valued? Briefly explain. [within 150 words] (b) You want a portfolio with the same risk as the market. Calculate the weights of stock A and B respectively. (please show me steps and round the final answer to 2 decimal places, thanks)
Please see the attached diagram image. Please show how to solve this problem and please show all steps and formulas in Excel. Based on the Capital Asset Pricing Model (CAPM) and the diagram below, what is the return of the stock if its beta is 1.2 or 0.8?
A second version of the Markowitz portfolio model maximizes expected return subject to a constraint that the variance of the portfolio must be less than or equal to some specified amount. Consider the Hauck Financial Service data. Click on the datafile logo to reference the data. Annual Return (%) Mutual Fund Year 1 Year 2 Year 3 Year 4 Year 5 Foreign Stock 10.06 13.12 13.47 45.42 -21.93 Intermediate-Term Bond 17.64 3.25 7.51 -1.33 7.36 Large-Cap Growth 32.41 18.71 33.28 41.46 -23.26 Large-Cap Value 32.36 20.61 12.93 7.06 -5.37 Small-Cap Growth 33.44 19.40 3.85 58.68 -9.02 Small-Cap Value 24.56 25.32 -6.70 5.43 17.31 (a) Construct this version of the Markowitz model for a maximum variance of 38. Let: FS = proportion of portfolio invested in the foreign stock mutual fund IB = proportion of portfolio invested in the intermediate-term bond fund LG = proportion of portfolio invested in the large-cap growth fund LV = proportion of portfolio invested in the large-cap value fund SG =…
Start with A-C and I will submit seperately for D! Thank you :)
Parts A-C have already been answered, looking for answer D.

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