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Can someone explain to me what i have to put into the calculator to calculate (c) market risk premium. Thanks 5. An investor has the

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Can someone explain to me what i have to put into the calculator to calculate (c) market risk premium. Thanks

image text in transcribed
5. An investor has the following portfolio of four shares. However, the amount invested in SYD is not supplied. The investor owns 4,000 SYD shares that are currently trading at $2.50 each. Each share is priced in equilibrium. Government bonds have a current yield of 5% p.a. Company Expected return Amount invested SYD 11.63% W BKK 17.09% 515,000 1.24 LHR 22.55% 55,000 1.3 (a) What is the expected return of the portfolio? (b) What is the risk of the portfolio? (cl Calculate the market risk premium. (d) The investor is considering the purchase of another share, LAX, that currently provides a return of 19.25%. if LAX has a beta of 1.4, are LAX shares overpriced, underpriced or fairly priced? Explain. (Answers: 1. 6924; 43.20%, 2. See lecture notes, 3. X: 8.4%, 112%,- Y:15.4%, 24.09%, 4. 13.38%, 14.94%, 5. (a) 15. 608%, (b) 1.088, {c} 9. 75%, (d) underprfced)

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