2.1 Determine the expected return of the entire portfolio that are listed above 2.2 Determine the...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
2.1 Determine the expected return of the entire portfolio that are listed above 2.2 Determine the beta of the entire portfolio listed above 2.3 Given the information provided above, you are required to determine whether the three banks are overpriced, fairly or overpaid based on the information provided. Assume the risk- free rate is 8% and that the expected return on the market portfolio is 12%. (5) (5) (15) SHARE PERCENTAGE OF ВЕТА EXPECTED RETURN (%) PORTFOLIO ABSA 40 1.00 12 FNB 25 0.75 11 СAPITEC 35 1.30 15 2.1 Determine the expected return of the entire portfolio that are listed above 2.2 Determine the beta of the entire portfolio listed above 2.3 Given the information provided above, you are required to determine whether the three banks are overpriced, fairly or overpaid based on the information provided. Assume the risk- free rate is 8% and that the expected return on the market portfolio is 12%. (5) (5) (15) SHARE PERCENTAGE OF ВЕТА EXPECTED RETURN (%) PORTFOLIO ABSA 40 1.00 12 FNB 25 0.75 11 СAPITEC 35 1.30 15
Expert Answer:
Answer rating: 100% (QA)
Answer to Question a Determination of Expected return of the entire Portfolio Expected Return of ent... View the full answer
Posted Date:
Students also viewed these corporate finance questions
-
Assume a risk free rate is 4%, an asset return estimate of 10% and the value of standard deviation of estimated return of 12%. What is the slope of the assets CML (Capital Market Line)?
-
The Swiss risk free rate is 7.15%. If the Swiss national market return has a mean of 11% and a standard deviation was 24.4%, what is the ex-post return/risk performance of the market?
-
1. Equation 1 is the expected return of the portfolio ? ? To explains the ethical embedding on the interrelationship between the assets in the portfolio and between various interacting portfolios ?...
-
Bilge Pumpworks and Seaworthy Rope Company agreed to merge on January 1, 20X3. On the date of the merger agreement, the companies reported the following data: Bilge Pumpworks has 10,000 shares of its...
-
Lee Adsitt and Alex Wiren were best friends at a small undergraduate college and they fought side by side in the jungles of Vietnam. On returning to the United States, they went their separate ways...
-
Hydrolysis of a compound a in dilute aqueous hydrochloric acid gave (along with methanol) a compound B, mp 164165C. Compound B had the molecular formula C16H16O4; it exhibited hydroxyl absorption in...
-
Use of slurry adsorbents has received some industrial attention because it allows for countercurrent movement of the solid and fluid phases. Your manager wants you to design a slurry adsorbent system...
-
Some people would say that Oliver Munday, Hard Rocks vice president for caf development, has the best job in the world. Travel the would to pick a country for Hard Rocks next caf, select a city, and...
-
* Select 2 - 3 of the topics below and discuss how they each influence financial decisions regarding risk and return: * The capital asset pricing model ( CAPM ) * The constant - growth model *...
-
If the a company has a market value of debt of 5 million pound and a market value of equity of 15 million pounds what's is the weight of debt for wacc calculation purpose?
-
Mass= 89.70kg. Assume the human is the system (only consider the forces acting on the human on your free body diagram). Assume the force of the right hand acting on the cable handle is 500N, 160...
-
Why should a coupon paying bond be viewed as a portfolio of zerocoupon bonds?
-
What factors cause a bonds price to change?
-
Suppose that a U.S. Treasury note maturing August 15, 2009 is purchased with a settlement date of July 31, 2007. The coupon rate is 3% and the maturity value of the position is $1,000,000. The next...
-
An investor is considering the purchase of a 20-year, 7% coupon bond selling for \($815.984\) and a par value of \($1,000.\) The yield to maturity is 9%. a. What would be the total future dollars...
-
What process assures that the market price of a Treasury security will not differ materially from the arbitrage-free value?
-
Part 2 0.0/3.0 points (graded) Another construction crew in northern Canada is about to start road work on a logging road. Being minor, their work will only take a single day. Since this road is far...
-
Suppose that fraction used = / 1.0 + 0.1Mt. for some parameter 1. Write the discrete-time dynamical system and solve for the equilibrium. Sketch a graph of the equilibrium as a function of ....
-
Profit is the figure which links the income statement and the statement of financial position. Discuss.
-
Why do we need to carry out post trial-balance adjustments when we are preparing the final accounts?
-
Consider a bounded standard maximum problem in two variables whose feasible region is of the form: where the constants \(b_{i}\) are non-negative. Give a geometric argument that a feasible point can...
Study smarter with the SolutionInn App