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- Assume that you manage a $10.00 million mutual fund that has a beta of 1.05 and a 9.50% required return. The risk-free rate is 2.20%. You now receive another $11.50 million, which you invest in stocks with an average beta of 0.65. What is the required rate of return on the new portfolio?Assume that you manage a $12.00 million mutual fund that has a beta of 1.15 and a 9.70% required return. The risk-free rate is 2.20%. You now receive another $15 million, which you invest in stocks with an average beta of 1.05. What is the required rate of return on the new portfolio? Do not round your intermediate calculations.Your client decides to invest $1.4 million in Blandystock and $0.6 million in Gourmange stock. Whatare the weights for this portfolio? What is theportfolio’s beta? What is the required return forthis portfolio?
- Assume that you manage a $10.00 million mutual fund that has a beta of 1.25 and a 9.50% required return. The risk-free rate is 2.20%. You now receive another $15.00 million, which you invest in stocks with an average beta of 0.80. What is the required rate of return on the new portfolio? (Hint: You must first find the market risk premium, then find the new portfolio beta.) Do not round your intermediate calculations. a. 9.17% b. 8.71% c. 7.92% d. 7.45% e. 9.65%Mr. Scared, a portfolio manager has a P10 million portfolio, which consist of P1 million invested in 10 separate stocks. The portfolio beta is 1.2. The risk free rate is 5% and the market risk premium is 6%. What is the portfolio’s required rate of return? Given the same details of Mr. Scared's case, what is the new required return of his portfolio using CAPM if he sells one of the stocks in his portfolio for P1 million which has a beta of 0.9 and uses the P1 million to purchase a new stock that has a beta of 1.6?Your client decides to invest $60 million in Flama and $40 million in Blanca stocks. The risk-free rate is 2% and the market risk premium is 4%. The beta of the Flama Stock is 2, and the beta of the Blanca stock is 4. What are the weights for this portfolio? What is the portfolio beta? What is the required return of the portfolio?
- 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?You are a manger of the Lowell Fund and manage a portfolio of $21 million. Your portfolio has a beta of 1 2 and required return of 12 percent. You receive $4 million additional to invest in the portfolio, and you invest it in a stock with a beta of 1.6. The risk-free rate is 5 percent. What is the required return on the new portfolio? (Hint Calculate weighted average beta after new capital investment.) OA. 10.78% B. 1.26% OC 12.37% OD.3.81% ⒸE. 9.42% OF. 5.80%the market portfolio has an expected return of 18% and the risk-free rate is 6%. An investor borrows $100 at the risk-free rate and invests this and a further $100 of his own in the market portfolio. What is his expected return?
- You have $122,000 to invest in a portfolio containing Stock X and Stock Y. Your goal is to create a portfolio that has an expected return of 17.6 percent. Stock X has an expected return of 14.0 percent and a beta of 1.26, and Stock Y has an expected return of 9.5 percent and a beta of 1.00. a. How much money will you invest in Stock Y? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. What is the beta of your portfolio?You have $122,000 to invest in a portfolio containing Stock X and Stock Y. Your goal is to create a portfolio that has an expected return of 17.6 percent. Stock X has an expected return of 14.0 percent and a beta of 1.26, and Stock Y has an expected return of 9.5 percent and a beta of 1.00. a. How much money will you invest in Stock Y? (A negative answer should be indicated by a minus sign. Do not round Intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. What is the beta of your portfolio? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) a. Investment in Stock Y b. Beta of the portfolioYou have been managing a $5 million portfolio that has a beta of 1.15 and a required rate of return of 9.025%. The current risk-free rate is 5%. Assume that you receive another $500,000. If you invest the money in a stock with a beta of 0.95, what will be the required return on your $5.5 million portfolio? Do not round intermediate calculations. Round your answer to two decimal places. ___%