Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose you are the money manager of an investment fund. The fund consists of four stocks with the following investments and betas: table [

Suppose you are the money manager of an investment fund. The fund consists of four stocks with the following investments and betas:
\table[[Stock,Investment,Beta],[A,$357,513,1.14],[B,$630,946,0.33],[C,$1,030,241,0.57],[D,$1,766,104,1.65]]
If the market's required rate of return is 17.59% and the risk-free rate is 0.91%, what is the required rate of return of the portfolio?
Question 8
10 pts
Given the following information, determine the beta coefficient for Stock L that is consistent with equilibrium: E(r)=18%, risk free rate =0.7%, rate or return for market =10.2%. State your answer to 4 decimal places.
Question 9
10pts
Beale Manufacturing Company has a beta of 1.56, and Foley Industries has a beta of 0.36, the required return on an index fund that holds the entire stock market is 17.8%, and the risk-free rate of return is 2.6%. By how much does the required return on Beal's stock exceed the required return on the Foley's stock? State your answer to 2 decimal places.
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Corporate Finance For Dummies

Authors: Michael Taillard

2nd Edition

1119850312, 978-1119850311

More Books

Students also viewed these Finance questions

Question

Define induction and what are its objectives ?

Answered: 1 week ago

Question

Discuss the techniques of job analysis.

Answered: 1 week ago

Question

How do we do subnetting in IPv6?Explain with a suitable example.

Answered: 1 week ago

Question

Explain the guideline for job description.

Answered: 1 week ago

Question

What is job description ? State the uses of job description.

Answered: 1 week ago