Your investment club has only two stocks in its portfolio. $25,000 is invested in a stock with a beta of 0.9, and $40,000 is invested in a stock with a beta of 1.6. What is the portfolio's beta? Do not round intermediate calculations. Round your answer to two decimal places.

Q: Assume that the risk-free rate is 2.5% and the required return on the market is 8%. What is the…

A: According to capital assets pricing model, The expected return on equity stock is calculated as…

Q: A stock has an expected return of 12.4%, the risk-free rate is 6.5%, and the market risk premium is…

A: In the given problem we require to calculate the Beta of the stock using following details: Expected…

Q: A stock has an expected return of 13%, its beta is 0.79, and the risk-free rate is 5%. What must the…

A: We require to calculate the expected return on the market in this question using following details:…

Q: Beale Manufacturing Company has a beta of 1.9, and Foley Industries has a beta of 0.3. The required…

A: CAPME(ri) = Rf  + Bi * (E(Rm) - Rf)E(ri) = Expected returnRf = Risk free rateBi = BetaE(Rm) =…

Q: AA Corporation's stock has a beta of 1.2. The risk-free rate is 6%, and the expected return on the…

A: Beta = 1.2Risk-free rate = 6% = 0.06Expected return on the market = 11% = 0.11

Q: expected

A: Introduction: Capital asset pricing model or CAPM as it is known widely is a tool which helps in…

Q: A stock has a beta of 1.07, the expected return on the market is 10.1 percent, and the risk- free…

A: Beta = 1.07 Market return = 10.1% Risk free rate = 4.9%

Q: our investment club has only two stocks in its portfolio. $15,000 is invested in a stock with a beta…

A: Portfolio Beta is the weighted average beta of individual stock  Weight of stock 1 = 15000 /…

Q: A stock has a beta of 1.15, the expected return on the market is 10.5%, and the risk - free rate is…

A: The expected return on the stock is calculated using the following equation

Q: Stock X has a beta of 0.5 and Stock Y has a beta of 1.5. Which of the following statements must be…

A: Financial securities are the financial assets and instruments that are traded in the financial…

Q: Beale Manufacturing Company has a beta of 1.8, and Foley Industries has a beta of 0.20. The required…

A: In this question we require to calculate the required return for Beale Manufacturing Company and…

Q: AA Corporation's stock has a beta of 0.8. The risk-free rate is 2%, and the expected return on the…

A: The required rate of return measure of the profitability of an investment and is used to evaluate…

Q: A stock has a Beta of 1.0.  The risk-free rate is 4.7%, and the Market Risk Premium is estimated at…

A: Stock beta =1.0 Risk. Free rate =4.70% Market risk premium =7.40% Market risk premium = market…

Q: Beale Manufacturing Company has a beta of 1.2, and Foley Industries has a beta of 0.40. The required…

A: The objective of the question is to find out by how much Beale's required return exceeds Foley's…

Q: erilu Markets has a beta of 1.46. The risk-free rate of return is 2.98 percent and the market rate…

A: Risk premium = Beta(market return - risk free rate)

Q: Suppose that the risk-free rate is 3% and the expected return on the market portfolio is 6%. A…

A: To determine if the stock is overpriced or underpriced according to the Capital Asset Pricing Model…

Q: Your investment portfolio consists of $15,000 invested in only one stock—Amazon. Suppose the…

A: The worth of Amazon stock to be sold is $15,000. This is because the value of Amazon stock today is…

Q: What is the required rate of return on AA's stock?

A: Required rate of return (RRR) is the least required rate at which an investor will agree to invest…

Q: Your investment club has only two stocks in its portfolio. $20,000 is invested in a stock with a…

A: The beta of the stock refers to the risk factor which then gets multiplied by the market risk…

Q: Suppose you hold a portfolio consisting of a $10,000 investment in each of 8 different common…

A: Beta shows the risk related to the overall risk of market and beta of portfolio is the weighted beta…

Q: What is the required rate of return on AA's stock?

A: Required Rate of Return: It is the minimum rate acceptable by the investor for owning the stock of…

Q: Beale Manufacturing Company has a beta of 1.5, and Foley Industries has a beta of 0.30. The required…

A: Calculation of required return: = Risk free rate + Beta (Market rate - Risk free rate)

Q: Stock R has a beta of 1.5, Stock S has a beta of 0.85, the required return on an average stock is…

A: Investors want to be compensated for risk and time worth of money. The risk-free rate in the CAPM…

Q: What should be the market price of the stock?   $     If the current market price of the stock is…

A: Share Price: The price of a share is an indication of its present value to buyers and sellers.…

Q: AA Corporation's stock has a beta of 1.1. The risk-free rate is 3%, and the expected return on the…

A: We will use the CAPM (Capital Asset Pricing Model) here. The CAPM model essentially describes the…

Q: Currently, the risk-free return is 5 percent, and the expected market rate of return is 14 percent.…

A: The problem case wants to calculate the expected return of the portfolio having three stocks. The…

Q: Consider the single-index model. The alpha of a stock is 2.00%. The return on the market index is…

A: Alpha of the stock = 2%Return on market (RM) = 12%Risk-free rate of return (RF) = 5.5%Actual return…

Q: A stock has a beta of 1.24 and an expected return of 12.2 percent. A risk-free asset currently earns…

A:

Q: You have $56,000. You put 24% of your money in a stock with an expected return of 13%, $31,000 in a…

A: As per the given information: Total amount = $56,00024% of money invested in a stock with an…

Q: The risk-free rate of return is 2 percent, and the expected return on the market is 6.1 percent.…

A: Value of stock can be determined based on the dividend and growth of dividend and required rate of…

Q: Beale Manufacturing Company has a beta of 1.9, and Foley Industries has a beta of 0.4. The required…

A: Investors have different options to make investments, and the motive behind investments is to…

Q: You are trying to develop a strategy for investing in two different stocks. The anticipated annual…

A: The expected rate of return is the average amount of interest that investing in stock provides while…

Q: Stock R has a beta of 2.0, Stock S has a beta of 0.75, the required return on an average stock is…

A: Given, The Beta of Stock R is 2 The beta of stock S is 0.75 Average stock return is 14% Risk free…

Q: Your investment club has only two stocks in its portfolio. $30,000 is invested in a stock with a…

A: Portfolio Beta = [ (weight of stock A * Beta of stock A) + (weight of stock A * Beta of stock A)…

Q: A stock has a beta of 0.65, the expected return on the market is 15%, and the risk- free rate is 8%.…

A: In the given problem we require to calculate the expected return on stock: According to CAPM i.e.…

Q: Beale Manufacturing Company has a beta of 1.8, and Foley Industries has a beta of 0.60. The required…

A: Beale's beta = 1.8Foley's beta = 0.60Risk-free rate = 3.5%Market rate = 11%

Q: A stock has a beta of 1.21 and an expected return of 11.9 percent. A risk-free asset currently earns…

A: Beta of portfolio = 2.41Stock beta = 1.21Stock A expected return = 11.9%Risk-free asset return =…

Q: Stock R has a beta of 1.5, Stock S has a beta of 0.85, the required return on an average stock is…

A: The objective of the question is to find out the difference in the required returns of two stocks…

Q: Beale Manufacturing Company has a beta of 1.2, and Foley Industries has a beta of 0.50. The required…

A: Solution: Required Return = Rf + Beta(Rm-Rf) Return for Beale = 4.5% + 1.2(9% - 4.5%) = 4.5% +…

Q: Suppose the risk-free return is 5.3% and the market portfolio has an expected return of 10.2% and a…

A: We need to use CAPM model to calculate expected rate of return. Expected return =Risk free…

Q: A stock has an expected return of 11 percent, its beta is 1.20, and the risk-free rate is 4.4…

A: Formula to Calculate the Expected Equity Return as belowExpected Equity Return = Risk Free return +…

Q: A company's stock has a beta of 1.20, the risk-free rate is 1.6%, and the market risk premium is…

A: We will have to apply the CAPM model here. CAPM is the capital asset pricing model.

Q: Beale Manufacturing Company has a beta of 1.6, and Foley Industries has a beta of 0.55. The required…

A: The capital assets pricing model is a technique that helps to compute the required rate of return on…

Q: Beale Manufacturing Company has a beta of 1, and Foley Industries has a beta of 0.65. The required…

A: Beale Manufacturing Company Beta is 1 Foley Industries beta is 0.65 Market return is 10.5% Risk free…

Q: urrently, the risk-free return is 2 percent, and the expected market rate of return is 11 percent.…

A: To calculate the expected market return we will use the below formula   Expected portfolio return =…