Suppose you hold a diversified portfolio consisting of a $7,500 investment in each of 20 different common stocks. The portfolio beta is equal to 1.12. Now, suppose you have decide to sell one of the stocks in your portfolio with a beta equal to 1.0 for 7,500 and to use these proceeds to buy another stocks for your portfolio. Assume the new stocks beta to 1.75. Calculate your portfolios new beta.
Q: pls answer the incorrect answers need help!
A: a. Intrinsic Value per Share:We can use the Gordon Growth Model (DDM) to estimate the intrinsic…
Q: Suppose you purchase 500 shares of Blue Acre, which currently trading at $60 per share. Suppose that…
A: Margin trading involves borrowing funds from a broker to purchase securities, such as stocks, bonds,…
Q: Beginning three months from now, you want to be able to withdraw $2,700 each quarter from your bank…
A: Compound = quarterly = 4Payment = p = $2700Time = t = 3 * 4 = 12Interest Rate = r = 0.49%
Q: The annual Sport Club membership fees of $2500 are due on August 31, 2018. Club management offers a…
A: The following information has been provided,Annual membership fees = $2,500 (due date = 31st August,…
Q: 2 Ms. Ayesha purchased 4,000 shares at Rs. 25 each on 15.10.19. She earned dividends as below: 8,…
A: The objective of the question is to calculate the holding period returns and yields, the annualized…
Q: Consider the characteristics of the following three stocks: Standard Deviation Pic Image Tax Help…
A: Stock correlation in an investment portfolio refers to how prices of stocks move together. If they…
Q: Baghiben
A: The objective of this question is to calculate the expected return and standard deviation for the…
Q: Antonio would like to replace his golf clubs with a custom-measured set. A local sporting goods…
A: The objective of the question is to determine whether Antonio should cash in his certificate of…
Q: How would a certified kingdom advisor engage conversation with a non-believer who is hostile toward…
A: The objective of this question is to understand how a Certified Kingdom Advisor (CKA) can engage in…
Q: Suppose Capital One is advertising a 60-month, 5.78% APR motorcycle loan. If you need to borrow…
A: Monthly payment = $167.31Explanation:Given information, Number of periods (n) = 60 monthsAPR (r) =…
Q: You have been pricing Samsung-Galaxy SmartWatch in several stores. Three stores have the identical…
A: The term finance charge refers to the amount of interest charged on the principal loan outstanding…
Q: Jesaki Bank offers a 10-year CD that earns 2.5% compounded continuously. If $12,426 is is invested…
A: Future value in case of continuous compounding = P X e ^(r x t)whereP = Principal amount = initial…
Q: Kramer's investment project costs $14300 and has abbual cash flows of $3800 for six years. A. What…
A: The objective of this question is to calculate the discounted payback period for Kramer's investment…
Q: Cachita Haynes. Cachita Haynes works as a currency speculator for Vatic Capital of Los Angeles. Her…
A: Explanation to Put Option:The value of the put option increases when the underlying asset value…
Q: currently at its target debt-equity ratio of .75. It's considering building a new $41 million…
A: Net present value is a discounted cash flow method used for evaluating capital investment projects.…
Q: Question content area top Part 1 What sum deposited today at 6% compounded annually for 15 years…
A: The objective of the question is to find out the present value of a lump sum amount that will yield…
Q: A loan for $36, 000 was obtained to be paid off over 5 years at 5.5% P. A with monthly repayments. a…
A: First, the present value annuity formula can be employed to determine the monthly payment (PMT).…
Q: A bond with a face value of $10,000 pays $600 in interest annually and matures in 1 year. The bond…
A: A bond is a fixed-income security that allows the investor to receive periodic coupon payments…
Q: Sunland Company is considering a capital investment of $208,000 in additional productive facilities.…
A: Capital budgeting refers to the concept used for evaluating the viability of the project using…
Q: The sisyphean company has a bond outstanding with a face value of $1,000 that reaches maturity in 15…
A: The objective of this question is to calculate the Yield to Maturity (YTM) for a bond. The YTM is…
Q: In a bond portfolio, the following are the present values of all cash flows by annual period: Year…
A: Given ,Bond portfolioYear PV cash flow114.3213.2315.3410.5518.4Objective : Calculate percentage…
Q: One year ago, Jeff purchased 1 share of Buy-Mart stock. A share of Buy-Mart is currently priced at…
A: Let Initial Price be PFinal Price = $205.25Annual Dividend = $8.53Return = -5.56% or -0.0556We will…
Q: Burke's Corner currently selis blue jeans and T-shirts. Management is considering adding fleece tops…
A: Operating cash flow refers to the cash remaining after meeting all the operating expenses from the…
Q: Roger borrowed on margin to $10K to buy 40,000 shares of NVM stock when it was trading at 45 cents a…
A: A margin account is a brokerage account that facilitates borrowing of funds by investors from…
Q: A bond porfolio composition and spread durations of its components is listed in the table below:…
A: Portfolio's spread duration = Weighted average spread duration of the securities in the…
Q: An insurance company is offering a new policy to its customers. Typically, the policy is bought by a…
A: The concept of time value of money will be used here. As per the concept of time value of money the…
Q: WACC 012345 6 7.80% Project A Project B -1225 395 402 423 432 489 512 -2146 592.5 603 634.5 648…
A: Net Present Value (NPV) is a financial measure used to analyze the profitability of an investment by…
Q: A company buys a color printer that will cost $ 17,000 to buy, and last 5 years. It is assumed that…
A: Cost = $17,000Period = 5 YearsCost of Captial = 8%
Q: Keiper, Inc., is considering a new three-year expansion project that requires an initial fixed asset…
A: Operating cash flow (OCF) is the cash flow generated/used because of a firm's day-to-day operations.…
Q: Critical path activities in this project?
A: The critical path activities in this project are: A, B, C, D, E, F, G, and H. These activities must…
Q: eBook A stock's returns have the following distribution: % Problem Walk-Through % Demand for the…
A: In the given case, we have provided the risk-free rate , probability of each state of economy and…
Q: (a) If Pena Company requires a 6% return on its investments, what is the net present value of this…
A: Net Present Value (NPV) is a financial metric used to evaluate the profitability of an investment or…
Q: Malcolm Technology issued a new series of bonds on January 1, 1985. They were sold at par ($1,000)…
A: The price of the bond on December 31, 1995, when interest rates had risen to 12%, would be…
Q: Contract Open High hilo Low Eurodollar (CME) -$1,000,000; pts of 100% 97.2400 97.2450 97.2225 Jan…
A: An essential financial tool utilized in the international financial markets is eurodollar futures.…
Q: Suppose that the U.S. firm Halliburton buys construction equipment from the Japanese firm Komatsu at…
A: Treasury bills (T-bills) are short-term government obligation securities with maturities ordinarily…
Q: Suppose you know that a company's stock currently sells for $66.60 per share and the required return…
A: Stock price = $ 66.60Required return (r) = 0.11Dividend yield = 0.055 (i.e. 0.11 / 2)Capital gain…
Q: Pls draw correct lines on graph for question
A: Let's tackle this botanical garden and picnic area project. We'll create a Gantt chart for…
Q: Marcia observed the following cash flow series (in $1000 units) in an accounting report at work. The…
A: Workings:Interest rate = 10%Present value of Year 0 = 378000Present value factor = 1 / ( 1 + r…
Q: A desk with a selling price of $400 is sold to a business in Ontario where HST is 13% and to a…
A: SOLUTION:Ontario :The Harmonized Sales Tax (HST) in Ontario is 13%.The selling price of the desk is…
Q: A stock trades for $45 per share. A call option on that stock has a strike price of $55 and an…
A: A call option refers to a derivative instrument that provides the holder the choice to purchase the…
Q: Days in accounts receivables and days cash on hand are both capital structure ratios. True False
A: Capital structure ratios are financial metrics used to evaluate a company's financial health and…
Q: Landman Corporation (LC) manufactures time series photographic equipment. It currently at its target…
A: Net present value is a discounted cash flow method used for evaluating capital investment projects.…
Q: An increasingly popular trend in mountain biking is to remove the chain and coast down the mountain.…
A: The term "terminal year cash flows" describes the cash flows anticipated to take place at the…
Q: Suppose that the current spot exchange rate is €0.85 per $ and the three-month forward exchange rate…
A: Spot exchange rate = € 0.85/$3-month forward exchange rate = € 0.8313/$US interest rate =…
Q: Suppose you have a 10-year bond (the bond will mature in 10 years), with a coupon rate of 2.45%.…
A: Bond price will be the aggregate of present value of all coupon payments and present value of face…
Q: Saving cash in the bank is not as attractive as it was in the past, and RBL is looking to invest…
A: One of the key ideas in contemporary finance is Harry Markowitz's Markowitz Portfolio Theory. Its…
Q: How much must you deposit each year into your retirement account starting now and continuing through…
A: An annuity is a financial product that provides a series of payments to the annuitant over a…
Q: The Two Sisters Corp. has a retum on assets of 9 percent, retum on equity 12 percent and a dividend…
A: Return on Assets = 9%Return on Equity = 12%Dividend Payout Ratio = 75% or 0.75We will calculate the…
Q: Question 3: Use the following information on Assets to calculate the weighted average duration for…
A: The weighted average duration is a measure used in finance to assess the sensitivity of a portfolio…
Q: he LA times recently carried a story that tuition could be increased in the University of California…
A: The concept of time value of money will be used here. As per the concept of time value of money the…
Suppose you hold a diversified portfolio consisting of a $7,500 investment in each of 20 different common stocks. The portfolio beta is equal to 1.12. Now, suppose you have decide to sell one of the stocks in your portfolio with a beta equal to 1.0 for 7,500 and to use these proceeds to buy another stocks for your portfolio. Assume the new stocks beta to 1.75. Calculate your portfolios new beta.
Step by step
Solved in 3 steps with 2 images
- Suppose you hold a diversified portfolio consisting of a $4,000 investment in each of 14 different common stocks. The portfolio beta is 1.30. You decide to sell one of the stocks in your portfolio with a beta equal to 0.8 for $3,500 and use these proceed to buy another stock for your portfolio. Assume the new stock’s beta is equal to 1.75. Calculate your portfolio’s beta.Suppose you hold a diversified portfolio consisting of a $7,500 investment in eachof 20 different common stocks. The portfolio beta is equal to 1.12. Now, supposeyou have decided to sell one of the stocks in your portfolio with a beta equal to 1.0for $7,500 and to use these proceeds to buy another stock for your portfolio.Assume the new stock’s beta is equal to 1.75. Calculate your portfolio’s new beta.Suppose you invest $100, $410, and $640 of your wealth into a stock, the market, and a risk - free asset, respectively. The beta of the stock is 1.3. What is the beta of the portfolio? Enter your answer rounded to 3 DECIMAL PLACES. Enter your response below.
- Suppose you held a diversified portfolio consisting of a $7,500 investmentin each of 20 different common stocks. The portfolio’s beta is 1.25. Now suppose you decided tosell one of the stocks in your portfolio with a beta of 1.0 for $7,500 and use the proceeds to buyanother stock with a beta of 0.80. What would your portfolio’s new beta be?Suppose you hold a portfolio consisting of a $10,000 investment in each of 8 different common stocks. The portfolio's beta is 1.25. Now suppose you decided to sell one of your stocks that has a beta of 1.00 and to use the proceeds to buy a replacement stock with a beta of 1.55. What would the portfolio's new beta be? Do not round your intermediate calculations.Assume you have formed a portfolio of stocks by investing $200 in stock X, $300 in stock Y, and $500 in stock Z. If the Beta for stock X, Y, and Z are -1 , 0.3 , and -1.8 respectively. What will be your portfolio Beta? (Round your answer to three decimal places. For example 1.23450 or 1.23463 will be rounded to 1.235 while 1.23448 will be rounded to 1.234)
- You have just invested in a portfolio of three stocks. The amount of money that you invested in each stock and its net are summarized below. Calculate the beta of the portfolio and use the capital asset pricing model (CAPM) to compute the expected rate of return for the portfolio. Assume that the expected rate of return on the market is 18% and that the risk-free rate is 6%. Stock A, Investment = $188,000, Beta=1.50, Stock B, Investment = $282,000, Beta =0.50, Stock C, Investment = $470,000, Beta = 1.30 Beta of the portfolio ? Expected rat of return ? %You want your portfolio beta to be 1.30. Currently, your portfolio consists of $100 invested in stock A with a beta of 1.4 and $300 in stock B with a beta of .6. You have another $400 to invest and want to divide it between an asset with a beta of 1.8 and a risk-free asset. How much should you invest in the risk-free asset?Suppose you held a diversified portfolio consisting of a $7,500 investment in each of 20 different common stocks. The portfolio's beta is 1.15. Now suppose you decided to sell one of the stocks in your portfolio with a beta of 1.0 for $7,500 and use the proceeds to buy another stock with a beta of 2.00. What would your portfolio's new beta be? Do not round intermediate calculations. Round your answer to two decimal places.
- Suppose you hold a portfolio consisting of a $10,000 investment in each of 8 different common stocks. The portfolio's beta is 1.30. Now suppose you decided to sell one of your stocks that has a beta of 0.80 and to use the proceeds to buy a replacement stock with a beta of 1.60. What would the portfolio's new beta be? Do not round your intermediate calculations. Round your final answer to 2 decimal places. a. 1.70 b. 1.34 c. 2.10 d. 1.60You hold a diversified portfolio consisting of a $15,082 invested in each of 5 different common stocks. The portfolio beta is equal to 1.13. You have decided to sell one of your stocks that has a beta equal to 0.8 for $15,082. You plan to use the proceeds to purchase another stock that has a beta equal to 1.9. What will be the beta of the new portfolio? O 1.45 O 1.75 O 1.35 O 1.65 O 1.55 27You have just invested in a portfolio of three stocks. The amount of money that you invested in each stock and its beta are summarized below. Stock Investment Beta A $218,000 1.50 B 327,000 0.60 C 545,000 1.18 Calculate the beta of the portfolio and use the Capital Asset Pricing Model (CAPM) to compute the expected rate of return for the portfolio. Assume that the expected rate of return on the market is 17 percent and that the risk-free rate is 8 percent. (Round beta answer to 3 decimal places, e.g. 52.750 and expected rate of return answer to 2 decimal places, e.g. 52.75%.) Beta of the portfolio Expected rate of return %