The value of beta of the portfolio. Introduction: The beta value is useful while calculating the systematic risk of the portfolio. It measures the arise risk of the market due to movement. In general the beta value should be unity for the assets. Low beta value represents the unpredictable investment.

Question

Want to see more full solutions like this?

Answer 1

Question

100%

Chapter 9, Problem 1PS

Summary Introduction

To calculate: The value of beta of the portfolio.

Introduction: The beta value is useful while calculating the systematic risk of the portfolio. It measures the arise risk of the market due to movement. In general the beta value should be unity for the assets. Low beta value represents the unpredictable investment.

Expert Solution & Answer

Answer to Problem 1PS

The beta value is 1.5 for the portfolio.

Explanation of Solution

Given that the expected return rate E(rp) = 18%, risk free rate rf = 8%, expected market rate E(rm) = 14%. Now beta value is calculated by given formula,

β=E(rp)−rfE(rm)−rf , now substitute the values,

β=18−614−6

β=128

= 1.5

Hence the beta value is 1.5 for the portfolio.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

No chatgptPlease don't answer i will give unhelpful all expert giving wrong answer he is giving answer with using incorrect values.

Please don't answer i will give unhelpful all expert giving wrong answer he is giving answer with incorrect data.

4. On August 20, Mr. and Mrs. Cleaver decided to buy a property from Mr. and Mrs. Ward for $105,000. On August 30, Mr. and Mrs. Cleaver obtained a loan commitment from OKAY National Bank for an $84,000 conventional loan at 5 percent for 30 years. The lender informs Mr. and Mrs. Cleaver that a $2,100 loan origination fee will be required to obtain the loan. The loan closing is to take place September 22. In addition, escrow accounts will be required for all prorated property taxes and hazard insurance; however, no mortgage insurance is necessary. The buyer will also pay a full year's premium for hazard insurance to Rock of Gibraltar Insurance Company. A breakdown of expected settlement costs, provided by OKAY National Bank when Mr. and Mrs. Cleaver inspect the uniform settlement statement as required under RESPA on September 21, is as follows: I. Transactions between buyer-borrower and third parties: a. Recording fees--mortgage b. Real estate transfer tax c. Recording fees/document…

Answer 2

Question

100%

Chapter 9, Problem 1PS

Summary Introduction

To calculate: The value of beta of the portfolio.

Introduction: The beta value is useful while calculating the systematic risk of the portfolio. It measures the arise risk of the market due to movement. In general the beta value should be unity for the assets. Low beta value represents the unpredictable investment.

Expert Solution & Answer

Answer to Problem 1PS

The beta value is 1.5 for the portfolio.

Explanation of Solution

Given that the expected return rate E(rp) = 18%, risk free rate rf = 8%, expected market rate E(rm) = 14%. Now beta value is calculated by given formula,

β=E(rp)−rfE(rm)−rf , now substitute the values,

β=18−614−6

β=128

= 1.5

Hence the beta value is 1.5 for the portfolio.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

100%

Chapter 9, Problem 1PS

Summary Introduction

To calculate: The value of beta of the portfolio.

Introduction: The beta value is useful while calculating the systematic risk of the portfolio. It measures the arise risk of the market due to movement. In general the beta value should be unity for the assets. Low beta value represents the unpredictable investment.

Expert Solution & Answer

Answer to Problem 1PS

The beta value is 1.5 for the portfolio.

Explanation of Solution

Given that the expected return rate E(rp) = 18%, risk free rate rf = 8%, expected market rate E(rm) = 14%. Now beta value is calculated by given formula,

β=E(rp)−rfE(rm)−rf , now substitute the values,

β=18−614−6

β=128

= 1.5

Hence the beta value is 1.5 for the portfolio.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

100%

Chapter 9, Problem 1PS

Summary Introduction

To calculate: The value of beta of the portfolio.

Introduction: The beta value is useful while calculating the systematic risk of the portfolio. It measures the arise risk of the market due to movement. In general the beta value should be unity for the assets. Low beta value represents the unpredictable investment.

Expert Solution & Answer

Answer to Problem 1PS

The beta value is 1.5 for the portfolio.

Explanation of Solution

Given that the expected return rate E(rp) = 18%, risk free rate rf = 8%, expected market rate E(rm) = 14%. Now beta value is calculated by given formula,

β=E(rp)−rfE(rm)−rf , now substitute the values,

β=18−614−6

β=128

= 1.5

Hence the beta value is 1.5 for the portfolio.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Question

100%

Answer 6

Question

100%

Answer 7

Chapter 9, Problem 1PS

Summary Introduction

To calculate: The value of beta of the portfolio.

Introduction: The beta value is useful while calculating the systematic risk of the portfolio. It measures the arise risk of the market due to movement. In general the beta value should be unity for the assets. Low beta value represents the unpredictable investment.

Expert Solution & Answer

Answer to Problem 1PS

The beta value is 1.5 for the portfolio.

Explanation of Solution

Given that the expected return rate E(rp) = 18%, risk free rate rf = 8%, expected market rate E(rm) = 14%. Now beta value is calculated by given formula,

β=E(rp)−rfE(rm)−rf , now substitute the values,

β=18−614−6

β=128

= 1.5

Hence the beta value is 1.5 for the portfolio.

Answer 8

Chapter 9, Problem 1PS

Summary Introduction

To calculate: The value of beta of the portfolio.

Introduction: The beta value is useful while calculating the systematic risk of the portfolio. It measures the arise risk of the market due to movement. In general the beta value should be unity for the assets. Low beta value represents the unpredictable investment.

Expert Solution & Answer

Answer to Problem 1PS

The beta value is 1.5 for the portfolio.

Explanation of Solution

Given that the expected return rate E(rp) = 18%, risk free rate rf = 8%, expected market rate E(rm) = 14%. Now beta value is calculated by given formula,

β=E(rp)−rfE(rm)−rf , now substitute the values,

β=18−614−6

β=128

= 1.5

Hence the beta value is 1.5 for the portfolio.

Answer 9

Chapter 9, Problem 1PS

Summary Introduction

To calculate: The value of beta of the portfolio.

Introduction: The beta value is useful while calculating the systematic risk of the portfolio. It measures the arise risk of the market due to movement. In general the beta value should be unity for the assets. Low beta value represents the unpredictable investment.

Answer 10

Expert Solution & Answer

Answer to Problem 1PS

The beta value is 1.5 for the portfolio.

Answer 11

Expert Solution & Answer

Answer 12

Expert Solution & Answer

Answer 13

Explanation of Solution

Given that the expected return rate E(rp) = 18%, risk free rate rf = 8%, expected market rate E(rm) = 14%. Now beta value is calculated by given formula,