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HAS TO BE SOLVED ON BA II FINANCIAL CALC. PLEASE SHOW ALL KEYSTROKES. Will rate all answers wrong or right. Thanks!!! 3. You invest in
HAS TO BE SOLVED ON BA II FINANCIAL CALC. PLEASE SHOW ALL KEYSTROKES. Will rate all answers wrong or right. Thanks!!!
3. You invest in a portfolio consisting of two securities. You invest 70% of your money in Regions Financial Corp. stock, and the other 30% in General Electric stock. The expected return on Regions Financial Corp. stock is 12%, and the expected return on General Electric stock is 9%. What is the expected return on your portfolio? 4. Suppose that the risk-free rate is 4%, and the expected return on the market is 7%. What is the expected return on stock in Coyne, Inc., assuming that the beta of Coyne stock is 1.25? 5. Suppose that the expected return on stock in Pearce Corporation is 8%, the risk-free rate is 4%, and the expected return on the market is 9%. What is the beta for stock in Pearce Corporation? 6. Suppose that the risk-free rate is 5%, and that a particular asset has a beta of 0.95 and an expected return of 14.5%. What is the expected return on the market? 7. Suppose that the expected return on the market is 14%. A particular asset has a beta of 0.8, and an expected return of 12.6%. What is the risk-free rate? 8. You are interested in buying a bond having a face value of $1,000, a time to maturity of 30 years, and a coupon rate of 12%. The bond makes one coupon payment per year, and its current price is $940. What is the yield to maturity on this bond? 9. Your company issues 20-year bonds that make one coupon payment per year. The bonds have a face value of $1,000 and a coupon rate of 11%. The bonds also have a call feature allowing your firm to call in the bonds 6 years after the date of issue, at 103% of par. Assume that the yield to maturity is 9% at the date of issue. If the bond is called in 6 years after the issue date, what is the yield to call? 10. Consider a bond having the following features: Face Value: $1,000 Remaining Time to Maturity: 4 years Coupon Rate: 9% Payments Per Year: 1 Required Return: 12% Calculate the duration measure for this bondStep by Step Solution
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