Question
Can i have answer and solution for these question please ? 18) The risk - free rate of interest is 3% and the market risk
Can i have answer and solution for these question please ?
18) The risk - free rate of interest is 3% and the market risk premium is 5%. Howard Corpo ration has a beta of 2.0, and last year generated a return of 8 % with a standard deviation of returns of 27%. The required return on Howard Corporation stock is
A) 13 %.
B) 24%.
C) 35 %.
D) 4 2%.
19) If you hold a portfolio made up of the following stocks:
Investment Value Beta
Stock X $4,000 1.5
Stock Y $5,000 1.0
Stock Z $1,000 0.5
What is the beta of the portfolio?
A) 1.33
B) 1.24
C) 1.15
D) 1.00
20) An investor currently holds the following portfolio:
Amount Inves ted
8,000 shares of Stock A $16,000 Beta = 1.3
15,000 shares of Stock B $48,000 Beta = 1.8
25,000 shares of Stock C $96,000 Beta = 2.2
If the risk - free rate of return is 2% and the market risk premium is 7%, then the required return on the portfolio is
A ) 14.91%
B) 15.93%
C) 21.91%
D) 23.93%
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