You want to create a portfolio equally as risky as the market, and you have $500,000 to invest. Information about the possible investments is given below: Asset InvestmentBeta Stock A $ 147,000 .92 Stock B $ 133,000 1.37 Stock C 1.52 Risk - free asset How much will you invest in Stock C? How much will you invest in the risk - free asset? Note:Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.

Beta of portfolio is computed as follows:-Bp = (Ba*Wa) + (Bb*Wb)+(Bc*Wc)+(Br*Wr)whereBp =beta of…

You want to create a portfolio equally as risky as the market, and you have $500,000 to invest. Information about the possible investments is given below: Asset Investmen Beta Stock A $ 147,000 .92 Stock B S 133,000 1.37 Stock C 1.52 Risk - free asset How much will you invest in Stock C? How much will you invest in the risk - free asset? Not Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.

You want to create a portfolio equally as risky as the market, and you have $500,000 to invest. Information about the possible investments is given below: Asset Investmen Beta Stock A $ 147,000 .92 Stock B S 133,000 1.37 Stock C 1.52 Risk - free asset How much will you invest in Stock C? How much will you invest in the risk - free asset? Not Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.

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

You own a portfolio equally invested in a risk-free asset and two stocks (If one of the stocks has a beta of 0.91 and the total portfolio is equally as risky as the market, what must the beta be for the other stock in your portfolio? (Hint: Remember that the market has a Beta=1; also remember that equally invested means that each asset has the same weight- since there are 3 assets, each asset's weight is 1/3 or 0.3333. Use 0.333333, and not only 0.33, sorry, calculation is sensitive to it). Enter the answer with 4 decimals (e.g. 1.1234)
You want to create a portfolio equally as risky as the market, and you have $5M to invest. Given the information below, what is your investment in the risk-free asset? Asset Stock A Stock B Stock C Risk-free Asset $0.8M $0.7M $0.9M $1.1M Investment $1M $2M Beta 0.7 1.25 1.5
You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1.23 and the total portfolio is equally as risky as the market, what must the beta be for the other stock in your portfolio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Stock beta 1.20
You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1.26 and the total portfolio is equally as risky as the market, what must the beta be for the other stock in your portfolio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Stock beta
You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1.59 and the total portfolio is equally as risky as the market, what must the beta be for the other stock in your portfolio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Portfolio beta
You want your portfolio beta to be .95. Currently, your portfolio consists of $4,000 invested in Stock A with a beta of 1.26 and $7,000 in Stock B with a beta of .94. You have another $8,000 to invest and want to divide it between an asset with a beta of 1.74 and a risk-free asset. How much should you invest in the risk-free asset? Multiple Choice O $3,966 $4,425 $4,902 $4,305 $5,083
Suppose that many stocks are traded in the market and that it is possible to borrow at the risk-free rate, r. The characteristics of two of the stocks are as follows: Stock A B Correlation-1 Rate of return. Expected. Return 79 10% Standard Deviation 30% 70% Required: a. Calculate the expected rate of return on this risk-free portfolio? (Hint: Can a particular stock portfolio be formed to create a "synthetic" risk-free asset?) (Round your answer to 2 decimal places.) b. Could the equilibrium ry be greater than rate of return? Yes No
You buy a put and a call on a stock that expire at time T. They are European options. Both the put and the call have an exercise price of $50. Plot the cash flows at the time of expiry. This strategy has a name. What is it?
Suppose you are considering investing some of your wealth in one of three investment portfolios: gold, food, or auto. Your broker provides you with the following table, which gives the probabilities of possible returns from each investment: Gold Food Auto Probability Return Probability Return Probability Return 0.2 15% 0.4 15% 0.2 20% 0.3 8.3% 0.6 5% 0.25 12% 0.2 10% 0.25 6% 0.3 5% 0.2 5% 0.1 0.10% Which investment should you choose to maximize your expected return: gold, food, or auto? If you are risk-averse and have to choose between the gold and the food investments, which should you choose? Why? Do I have to use standard deviation? Why?
fr1. Subject :- Accounting \ Graph the value of your portfolio as a function of the relevant stock price. Please create a graph for stock prices between 130 and 165. Assume today is the last day for exercising your options. Short a call at 163, long a put at 163, and long one share of the stock.
Currently, you own a portfolio comprised of the following three securities. How much of the riskiest security should you sell and replace with risk-free securities if you want your portfolio beta to equal 90 percent of the market beta? Stock Value $13,640 15,980 23,260 E F Multiple Choice O $7,023.15 $7,811.29 O $8,666.67 O $7,753.51 Beta 1.13 1.48 .86 $8,318.50
a) Calculate the expected return for Stock media Prima and Stock Astro b) Calculate the standard deviation for Stock media Prima and Stock Astro Note: please clear answer no lile, answer a, answer b.

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