Question
The following table contains beta coefficient estimates for six firms. Calculate the expected increase in the value of each firms shares if the market portfolio
The following table contains beta coefficient estimates for six firms. Calculate the expected increase in the value of each firms shares if the market portfolio were to increase by 10 percent. Perform the same calculation where the market drops by 10 percent. Which set of firms has the most variable or volatile stock returns?
| Company | Yahoo Finance(Yahoo.com) |
| Computers and Software | |
| Apple Inc. (AAPL) | 2.77 |
| Dell Inc. (DELL) | 1.73 |
| Hewlett Packard (HPQ) | 1.29 |
| Utilities | |
| American Electric Power Co. (AEP) | 0.68 |
| Duke Energy Corp. (DUK) | 0.53 |
| Centerpoint Energy (CNP) | 0.97 |
Input the expected decrease in the value of each firm's shares if the market portfolio were to decrease by 10%.(Round each answer to two decimal places.)
| Company | Yahoo Finance(Yahoo.com) | Expected Decrease | |
| Computers and Software | |||
| Apple Inc. (AAPL) | 2.77 |
| % |
| Dell Inc. (DELL) | 1.73 |
| % |
| Hewlett Packard (HPQ) | 1.29 |
| % |
| Utilities | |||
| American Electric Power Co. (AEP) | 0.68 |
| % |
| Duke Energy Corp. (DUK) | 0.53 |
| % |
| Centerpoint Energy (CNP) | 0.97 |
| % |
| Which set of firms has the most variable or volatile stock returns?(Select the best choice below.) | |||
| A. Utilities | |||
| B. Computer and Software firms | |||
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The Oxford Handbook Of Private Equity
Authors: Douglas Cumming
1st Edition
0195391586, 978-0195391589
