You won in a lottery $500 000 and are considering to invest the amount in any one of the following: a fund that mimics the ASX200 index, purchasing shares in AGL Energy Ltd, or shares in CSL Ltd. In order to make the decision you are required to use the following information: Stock/Index Beta AGL Energy Ltd 1.45 CSL Ltd 0.65 ASX200 Index 1.00 The expected return on the market portfolio is 119% and the risk- free rate is 5%. Perform the necessary calculations in order to determine which asset to invest in to obtain the highest return. E(Ri) = Rf.+ Beta x (Rm – Rf) For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac), 10pt E vE A I * Ō 8 Q ... BIUS Paragraph Arial
You won in a lottery $500 000 and are considering to invest the amount in any one of the following: a fund that mimics the ASX200 index, purchasing shares in AGL Energy Ltd, or shares in CSL Ltd. In order to make the decision you are required to use the following information: Stock/Index Beta AGL Energy Ltd 1.45 CSL Ltd 0.65 ASX200 Index 1.00 The expected return on the market portfolio is 119% and the risk- free rate is 5%. Perform the necessary calculations in order to determine which asset to invest in to obtain the highest return. E(Ri) = Rf.+ Beta x (Rm – Rf) For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac), 10pt E vE A I * Ō 8 Q ... BIUS Paragraph Arial
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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