Question
Please show all work 1) ABC Inc.'s stock has a 20% chance of producing a 10% return, a 50% chance of producing a 0% return,
Please show all work
1)
ABC Inc.'s stock has a 20% chance of producing a 10% return, a 50% chance of
producing a 0% return, and a 30% chance of producing a -5% return. What is the firm's
expected rate of return?
2)
XYZ Inc. is considering a capital budgeting project that has an expected return of 20%
and a standard deviation of 5%. What is the project's coefficient of variation?
3) An Investor has $400,000 invested in a 2-stock portfolio. $260,000 is invested in Stock X
and the remainder is invested in Stock Y. X's beta is 1.2 and Ys beta is 1.5. What is the
portfolio's beta?
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