Question
Please asnwer all the question 1) Your portfolio consists of $3,000 in ABC stock, $4,500 of DEF stock and $2,500 of GHI stock. Expected rates
Please asnwer all the question
1) Your portfolio consists of $3,000 in ABC stock, $4,500 of DEF stock and $2,500 of GHI stock. Expected rates of return are ABC 5%, DEF 12%, and GHI 16%. What is the portfolio expected rate of return? A) 10.9% B) 12.0% C) 11.4% D) 16.0%
2) You are considering investing in a portfolio consisting of 40% Electric General and 60% Buckstar. If the expected rate of return on Electric General is 16% and the expected return on Buckstar is 9%, what is the expected return on the portfolio? A) 12.50% B) 13.20% C) 11.80% D) 10.00%
3) The expected return on VZ next year is 12% with a standard deviation of 20%. The expected return on ANT next year is 24% with a standard deviation of 30%. The correlation between the two stocks is .6. If Emily makes equal investments in VZ and ANT, what is the standard deviation of her portfolio? A) 22.47% B) 25.00% C) 5.05% D) 15.00%
4) The expected return on ZV next year is 12% with a standard deviation of 20%. The expected return on TNA next year is 24% with a standard deviation of 30%. The correlation between the two stocks is -.6. If Hannah makes equal investments in ZV and TNA, what is the standard deviation of her portfolio? A) 22.47%. B) 12.04% C) 1.45%. D) 16.00%.
5) What is the expected dollar return on a portfolio which consists of $9,000 invested in an S&P 500 Index fund, $32,500 in a technology fund, and $8,500 in Treasury Bills. The expected rate of return is 11% on the S&P Index fund, 14% on the technology fund and 2% on the Treasury Bills. A) $13,640 B) $571 C) $4,500 D) $5,710
6) Your broker mailed you your year-end statement. You have $25,000 invested in Amazon, $18,000 tied up in Boeing, $36,000 in Caterpillar stock, and $11,000 in DuPont. The betas for each of your stocks are 1.43 for Amazon, .79 for Boeing, 1.37 for Caterpillar, and 1.71 for DuPont. What is the beta of your portfolio? A) 1.33 B) 1.31 C) 1.00 D) 5.30
7) On average, when the overall market changes by 10%, the stock of Veracity Communications changes 12%. Veracity's beta is A) 1.2. B) 8.33%. C) 12%. D) Insufficient information is provided
8) Bell Weather, Inc. has a beta of 1.25. The return on the market portfolio is 12.5%, and the risk-free rate is 5%. According to CAPM, what is the required return on this stock? A) 20.62% B) 9.37% C) 14.38% D) 15.62%
9) The expected return on the market portfolio is currently 11%. Battmobile Corporation stockholders require a rate of return of 23.0%, and the stock has a beta of 2.5. According to CAPM, determine the risk-free rate. A) 17.5% B) 2.75% C) 3.0% D) 9.2%
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