Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1 . A portfolio is invested 2 0 percent in Stock G , 6 0 percent in Stock J , and 2 0 percent in

1. A portfolio is invested 20 percent in Stock G,60 percent in Stock J, and 20 percent in Stock K. The expected returns on these stocks are 11 percent, 18 percent, and 25 percent, respectively. What is the portfolio's expected return?
Answer choices:
18%
18.90%
17.10%
14.40%
2.
You own a stock portfolio invested 30 percent in Stock Q,25 percent in Stock R,15 percent in Stock S, and 30 percent in Stock T. The betas for these four stocks are 1.13,0.71,0.46, and 0.75, respectively. What is the portfolio beta?
Answer choices:
.83
.81
.85
.77
3.
You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1 and the total portfolio is equally as risky as the market, what must the beta be for the other stock in your portfolio?
answer choices:
1.00
2.10
2.00
1.90
4.
A stock has an expected return of 14 percent, its beta is 1.25, and the expected return on the market is 12 percent. What must the risk-free rate be?
answer choices:
4.00%
4.16%
-1.00%
3.80%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Advanced Accounting

Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik

10th edition

0-07-794127-6, 978-0-07-79412, 978-0077431808

Students also viewed these Finance questions