Question
*CANNOT USE EXCEL TO SOLVE. CAN USE CALCULATOR FUNCTIONS. PLEASE SHOW ALL STEPS. Q: Given that r K = 8.2%, r RF = 5.9%, and
*CANNOT USE EXCEL TO SOLVE. CAN USE CALCULATOR FUNCTIONS. PLEASE SHOW ALL STEPS.
Q: Given that rK = 8.2%, rRF = 5.9%, and rM = 10.2%, determine the beta coefficient for Stock K that is consistent with equilibrium.
Q: Suppose rRF = 4.5%, rM = 10.9%, and bI = 0.5. What is rI, the required rate of return on Stock I?
Q:
John plans to invest $100,000 in either a risk-free bond or a portfolio of 100 stocks. If he buys the bond, it will be worth $107,000 at the end of one year, for a guaranteed return of 7 percent. Alternatively, he could put $1,000 each into 100 different stocks. Each stock has a 50-50 chance of being worth either $2,300 or $0 at the end of the year, so the expected return on each stock (and the whole portfolio) is 15 percent. Which of the following should make John more likely to invest in the stock portfolio? | ||||||||
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