Question
1) assume that you bought a stock for $50. If you sold the stock for $60 and you got $2 dividend. What was your annual
1) assume that you bought a stock for $50. If you sold the stock for $60 and you got $2 dividend. What was your annual return?
2) Assume that you formed a portfolio of three stock A,B, C. The return for stock A is 10%, the return for stock B is 6% and the return for stock C is 8%. If the weight invested is stock A is 0.3 and the weight invested in stock B is 0.4, Find the portfolio return.
3) Assume that you formed a portfolio of three stocks X, Y, and Z. The Stock X's beta is 1.5, stock y's beta is 2, and stock Z's beta is 0.5. If the weight of your wealth invested in stock X is 0.4, the weight invested in stock Y is 0.2, find the portfolio's beta.
4) Assume that a stock has a beta of 1.5, the risk free interest rate is 4%,a and the market return is 6%. Find the stock return (expected return).
5) Assume that it costs $1,000 to start a project. If the project will give $400 profit in the first year, $500 in the second year and $300 in the third year. find the pay back period.
Now assume that the interest rate is 10%, find the net present value (NPV) and the profitability index (PI) for this project
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