Question
Here are 8 Finance class questions, who can help? 1 .Bill Dukes has $100,000 invested in a 2-stock portfolio. $45,000 is invested in Stock X
Here are 8 Finance class questions, who can help?
1.Bill Dukes has $100,000 invested in a 2-stock portfolio. $45,000 is invested in Stock X and the remainder is invested in Stock Y. X's beta is 1.30 and Ys beta is 0.80. What is the portfolio's beta?
2.Porter Inc's stock has an expected return of 14.25%, a beta of 1.18, and is in equilibrium. If the risk-free rate is 3.20%, what is the market risk premium?
3.Safarri Company's stock has a beta of 1.30, the risk-free rate is 3.50%, and the market risk premium is 6.00%. What is Safarri's required return?
4.Cheng Inc. is considering a capital budgeting project that has an expected return of 16% and a standard deviation of 25%. What is the project's coefficient of variation?
5.Company A has a beta of 0.95, while Company B's beta is 1.18. The required return on the stock market is 12.00%, and the risk-free rate is 3.05%. What is the difference between A's and B's required rates of return?
6.Spring Valley Corporation's stock had a required return of 15.24% last year, when the risk-free rate was 4.75% and the market risk premium was 8.75%. Then an increase in investor risk aversion caused the market risk premium to rise by 2%. The risk-free rate and the firm's beta remain unchanged. What is the company's new required rate of return? (Hint: First calculate the beta, then find the required return.)
7. Ocean Breeze Corp's stock has a beta of 1.40, and its required return is 13.00%. Atlantic Style's stock has a beta of 0.80. If the risk-free rate is 4.00%, what is the required rate of return on Atlantic Style's stock? (Hint: First find the market risk premium.)
8. Fantasty Corp has a beta of 1.6 and is currently in equilibrium. The required rate of return on the stock is 14.00% versus a required return on an average stock of 10.00%. Now the required return on an average stock increases by 30.0% (not percentage points). Neither betas nor the risk-free rate change. What would Fantasty 's new required return be?
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