Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. You are invested 38.10% in growth stocks with a beta of 1.853, 36.70% in value stocks with a beta of 0.559, and 25.20% in

1. You are invested 38.10% in growth stocks with a beta of 1.853, 36.70% in value stocks with a beta of 0.559, and 25.20% in the market portfolio.  What is the beta of your portfolio? After completing all calculations, please round your answer to four decimal places.

  • Beta: 

2. The market risk premium for next period is 9.10% and the risk-free rate is 2.10%. Stock Z has a beta of 1.212 and an expected return of 14.90%. Calculate the following. Please answers as percentages (e.g. .1234 should be written as 12.34):

  1. Market's reward-to-risk ratio:  %
  2. Stock Z's reward-to-risk ratio:  %

3. An analyst gathered the following information for a stock and market parameters: stock beta = 1.020; expected return on the Market = 12.00%; expected return on T-bills = 2.00%; current stock Price = $7.61; expected stock price in one year = $14.71; expected dividend payment next year = $1.60. Calculate the following. Please answers as percentages (e.g. .1234 should be written as 12.34):

  1. Required return for this stock:  %
  2. Expected return for this stock:  %

Step by Step Solution

3.41 Rating (154 Votes )

There are 3 Steps involved in it

Step: 1

Answer 1 To calculate the beta of your portfolio we can use the following formula Portfolio beta Wei... blur-text-image

Get Instant Access to Expert-Tailored Solutions

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

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

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

Personal Finance

Authors: Thomas Garman, Raymond Forgue

12th edition

9781305176409, 1133595839, 1305176405, 978-1133595830

More Books

Students also viewed these Finance questions

Question

1. Whats your opinion, Joel? or Does anyone have another opinion?

Answered: 1 week ago

Question

22. Why is tPA not helpful in cases of hemorrhagepg109

Answered: 1 week ago