Year ASX 300 Index ASX 300 Dividend Yield (%) Return_risky portfolio 2010 4760.79 3.76 - 2011 4052.27 4.93 -0.147788 2012 4626.27 4.33 0.142718 2013 5304.8 3.99 0.147531 2014 5348.93 4.24 0.009118 2015 5249.09 4.72 -0.017783 2016 5617.73 4.09 0.071008 2017 6023.3 4.04 0.072914 2018 5596.96 4.48 -0.070038 2019 6647.74 3.95 0.188447 2020 6574.33 2.82 -0.010619 Average Std.dev     3.86% 10.56% Year Risk free rate (%) Return_risk-free asset 2011 4.51 - 2012 3.11 -0.309484 2013 2.61 -0.163052 2014 2.75 0.055662 2015 2.34 -0.150000 2016 1.78 -0.238503 2017 1.77 -0.005618 2018 2.02 0.141243 2019 0.90 -0.554455 2020 0.02 -0.977778 Average 2.18 -24.47% Calculate: Assuming E(Rc) = 7%, use E(Rc) = Rf + y* (E(Rp) - Rf) 1. % of Risky Assets: 2. % of Risk Free Assets: 3. Standard Deviation of the portfolio

Q: Husband and Wife have two biological children and one adopted child. Now that the adoption is finali...

A: adoption is a process of getting non-biological child of someone else legally.   

Q: Christensen & Assoc. is developing an asset financing plan. Christensen has $500,000 in current asse...

A: Given $500000 in current assets and $700000 in capital assets. Long term rate is 11% and short term ...

Q: For the following annuity due, determine the nominal annual rate of interest. Future Periodic Rent P...

A: Solution:- When an equal amount is paid at the beginning of each period, it is called annuity due. T...

Q: Find the term of the following ordinary general annuity. State your answer in years and months (from...

A: Solution:- When an equal amount is paid at end of each period, it is called as ordinary annuity. Now...

Q: During the month of January, direct labor cost totaled PhP850,000 and direct labor cost was 60% of p...

A: Labor cost = Php 850,000 Labor cost ratio in prime cost = 60% Prime cost = 850,000/0.60 = Php. 14166...

Q: 13. An all-equity firm currently has 1,000,000 shares outstanding with a market price of $10. The fi...

A: Value of an unlevered firm When a firm has both equity and debt in its capital structure, it is know...

Q: 11. Valuing Preferred Stock E-Eyes.com has a new issue of preferred stock it calls 20/20 preferred. ...

A: Annual dividend (D) = $20 First dividend payment period (n) = 20 years Required rate of return (r) =...

Q: he two principal hurdles which stand in the way of facilitating electronic commerce and electronic g...

A: In the new age of digital finance and digital transactions and digital commerce two emerging themes ...

Q: In March direct labor was 60% of conversion cost. If the manufacturing overhead cost for the month w...

A: Given Direct materials cost was PhP1,600,000 Manufacturing overhead cost was PhP1,900,000 Direct lab...

Q: State whether the Portfolio Nature is Defensive/Aggressive

A: Aggressive and Defensive Portfolios: Generally, aggressive portfolios have betas greater than 1 whil...

Q: Find i​ (the rate per​ period) and n​ (the number of​ periods) for the following annuity. Quarterly ...

A: Solution:- An equal amount deposited every period is known as annuity. Now, in annuity, rate per per...

Q: Given the returns of two shares F and H in the table below over the past 4 years. Find the average r...

A: The question related to portfolio management. we will first compute the average return of the portfo...

Q: Calculate the capitalized cost of a project that has an initial cost of P8,000,000 and an additional...

A: Initial Cost = P8,000,000 Additional Cost = P250,000 every 8 Year Annual operating costs = P150,000 ...

Q: Question 17 Issuing stock rather than increasing debt: O all of the other answers O reduces financia...

A: As per Bartleby Honor Code, when multiple questions are asked, the expert is required only to solve ...

Q: ORogy (AM saler, more secure and more efficient. It Capital investment at time o Net revenues in yea...

A: IRR is the rate at which NPV is Zero. As the rate provided in the question is 26% we will take two r...

Q: What are types of Fire Insurance Plans, shortly explain them?

A: The insurance that covers the damages or loss of property due to fire is known as fire insurance. Th...

Q: As an equity analyst you are concerned with what will happen to the required return to Universal Tod...

A: Rf = 4% Rm = 11% Beta = 1.2 Slope of SML = Rm - Rf = 11% - 4% = 7%

Q: Calculate the average rate of return for each stock during the 5-year period. Do not round intermedi...

A: Average rate of return can be defined as an average percent increase of value of an investment over ...

Q: Current price of Company X's stock is $100. The table below gives the data on end of the year prices...

A: current stock price $100

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A: In 2011, the rate of return was 4.51 percent.In 2012, the rate of return was 3.11 percent.In 2013, t...

Q: Question 7 Given the following information for three publically traded comparable companies, estimat...

A: An all-equity financed company is a company that is fully financed by equity and does not raise fund...

Q: Plymouth plc wishes to borrow £80 million at a fixed interest rate to fund a project. The firm would...

A: Here, Company P wants Fixed Interest Rate Company T wants Floating Interest Rate

Q: shown that there has been cheating occurred on any EXAM, the student(s) involved will be dealt with ...

A: Money Market is a financial market where short-term financial assets having liquidity of one year or...

Q: 1. A secretary works a 35-hour week for which she is paid $262.50. She works 6 hours over- time on S...

A: The sum of money paid by the employer to its workers for a specific period is known as wages. The ma...

Q: months. The interest rate is 7% compounded semi-annua determined to be 20.1488. Find the size of the...

A: Loans are paid the periodic payments these payments carry the payment for the interest and payment o...

Q: 11. For the bond in Problem 10 (a), find (a) the price, and (b) the price-plus-accrued, 4 mont hs af...

A: The price of a bond: The price of a bond can be computed at any point of time before maturity as the...

Q: If your Visa credit card has an APR of 14.49%, compounded monthly and your current balance is $425.6...

A: APR is 14.49% Compounded monthly Current Balance is $425.69 Time period 1 year Minimum monthly payme...

Q: 21. A property is bought for 50000. It's expected useful life is 10 years and will have a resale val...

A: Sum of digits method is also called as sum of years depreciation method. It declines the asset at hi...

Q: mt) A person wants to triple a sum of money by investing it for 17 years, and is shopping around for...

A: Investors are paid an amount of fee as interest for lending or depositing their money. Interest is c...

Q: r payoff be? What will your profit be?

A: Pay off refers to the gain or loss that buyers make from trading a stock option. There are three var...

Q: The finance charge for this billing cycle is The account balance on the next billing is

A: A credit card is a type of payment card which is issued to the user by banks or financial institutio...

Q: ompute the annuity of the money ompounded monthly at the rate o O 665 O 755 O 801

A: Future value of annuity includes the annuity amount deposited and compound interest accumulated over...

Q: A company has £5 million available and three possible projects, all of which are divisible: Project...

A: When dealing with investment appraisal of divisible projects, we should use profitability index. Pro...

Q: 1. Provide a Liquidity Ratio Analysis based on the current Ratio. 2. Provide a Profitability ratio ...

A: Ratio Analysis is the analysis of the financial statements of the company which determines the profi...

Q: QUESTION 6 You receive a RM15,000 signing bonus from your new employer and decide to invest it for 2...

A: Comparison of both the alternatives shall be based on the future value under the said alternatives.

Q: You buy a Westinghouse call with an exercise price of P20 paying P2.50. If Westinghouse stock closes...

A: Exercise price (X) = P 20 Call price (C) = P 2.50 Stock price ate expiration (S) = P 24.75

Q: A young couple has decided to make advance plans for financing their 5 year old daughter’s college e...

A: Number of deposits (n) = 10 First deposit one year after today r = 3% Let the annual deposit = A Wit...

Q: bonds have a maturity of 10 years with a $1000 face value, have an 8% coupon rate paid semiannually,...

A: Yield to call is discount rate at which current price is equivalent to the present value of coupon p...

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A: The Equivalent Uniform Annual Cost is a term which defines the total cost of an asset which is incur...

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A: Solution:- When an equal amount is withdrawn starting one period from now, it is called as ordinary ...

Q: Choose from liquidity premium, taxability premium, default risk premium, maturity premium.

A: Liquidity Premium: It represents the additional compensation paid for the investment that cannot be ...

Q: How much is the investor willing to pay for the bond

A: A bond is defined as the financial instrument that is used to raise capital from the market at a sta...

Q: Find the future value of the following ordinary annuity. Periodic Payment Payment Interval Term Inte...

A: Periodic payment (P) = $1450 Payment interval is 1 year, hence this payment is annual Interest rate ...

Q: 1. Over the years, Masterson Corporation’s stockholders have provided $34,000,000 of  capital when t...

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any ...

Q: the ROS On January 1, 2020 P1,000,000. The useful life is expected to be 10 years. On July 1, 2025, ...

A: The wear and tear of an asset during the useful life of an asset is known as depreciation. The depre...

Q: Terex company has a beta of 1.7 and is trying to calculate its cost of equity capital. If the risk -...

A: The cost of equity can be calculated by using CAPM formula based on risk premium and risk free rate.

Q: Given the following information for three publically traded comparable companies, estimate the the c...

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A: Uniform equivalent annual cost which is equivalent to the all cost today and would replace all cost.

Q: Which of the following supply and demand graphs for bonds issued by Company X represents what happen...

A: Default risk is the risk when the issuer of the bond is not able to make timely interest or coupon p...

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.