Question
Answer all of these questions with the right question number next to the correct choice. ANSWER ALL OR NONE 12)The characteristics of Regina's portfolio are
Answer all of these questions with the right question number next to the correct choice. ANSWER ALL OR NONE
12)The characteristics of Regina's portfolio are listed below:
Stock | Amount invested | Beta |
---|---|---|
1 | $5,000 | -0.1 |
2 | $2,000 | 1.9 |
3 | $3,000 | 1.1 |
4 | $6,000 | 1.0 |
Calculate the beta of Regina's portfolio.
13)What is an asset's expected rate of return if the current risk-free rate is 1.4%, the stock has a beta of 0.4, and the quoted market rate is 5.4%?
14)Asset A has an expected rate of return of 9% with a standard deviation of 20%. Asset B has an expected rate of return of 17% and a standard deviation of 28%. As a risk averse investor, which asset would you hold if you only wish to hold one of the two assets? Calculate the coefficient of variation of the less risky asset.
15)
Economic conditions | Probabilities | Expected rates of return |
---|---|---|
Strong | 0.50 | 13% |
Normal | 0.30 | 5% |
Weak | 0.80 | 5% |
Calculate the expected rate of return on the stock of a company described by the information in the table above.
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