FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

UPS, a delivery services company, has a beta of 1.3, and Wal-Mart has a beta of 0.9. The risk-free rate of interest is 4% and

image text in transcribed
UPS, a delivery services company, has a beta of 1.3, and Wal-Mart has a beta of 0.9. The risk-free rate of interest is 4% and the market risk premium is 5.5%. What is the expected return on a portfolio with 60% of its money in UPS and the balance in Wal-Mart? 10.27% 10.84% 9.94% 11.08%

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

Step: 3

blur-text-image

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

Financial Analysts Indispensable Pocket Guide

Financial Analysts Indispensable Pocket Guide

Authors: Ram Ramesh

1st Edition

0071361561, 978-0071361569

More Books

Students also viewed these Finance questions

Question

★★★★★
At December 31, 2017, the trading securities for Storrer, Inc. are as follows. Instructions (a) Prepare the adjusting entry at December 31, 2017, to report the securities at fair value. (b) Show the...

Answered: 1 week ago

Question

★★★★★
How is the shape of the binomial distribution changed for a given value of p as the sample size is increased? Discuss.

Answered: 1 week ago

Question

★★★★★
Your friend, Diana Wood, recently completed the second year of her business and just received annual financial statements from her accountant. Wood finds the income statement and balance sheet...

Answered: 1 week ago

Question

★★★★★
UPS, a delivery services company, has a beta of 1.3, and Wal-Mart has a beta of 0.9. The risk-free rate of interest is 4% and the market risk premium is 5.5%. What is the expected return on a...

Answered: 1 week ago

Question

★★★★★
Bank Reconciliation and Entries The cash account for Coastal Bike Co. at October 1, 2019, indicated a balance of $14,300. During October, the total cash deposited was $71,490 and checks written...

Answered: 1 week ago

Question

★★★★★
Computerized medical records have promoted ________ in recent years, while industry costs are ________. Question 28 options: a) greater efficiency; rising b) decreased privacy; declining c) greater...

Answered: 1 week ago

Question

★★★★★
You recently bought a home M7.5 Discussion: Considering the Possibilities in Your Own Backyardwith a structure distant from the main house. This area was used as an art studio by the previous owner....

Answered: 1 week ago

Question

★★★★★
When several conditions are necessary for the top event to occur, we use the "AND" symbol. If the failure rates (IE probabilities) are known for each of these conditions, what would we then do to...

Answered: 1 week ago

Question

★★★★★
Question 1 Which theoretical probabilities are equal to 1/3? Check all that apply. landing on a star space on the first roll rolling an even number on the first roll landing at Cat Town on the first...

Answered: 1 week ago

Question

★★★★★
Suppose you put $1,500per month into a Roth IRA, that pays 10%APR (compounded monthly).Assume you have nothing saved today, calculate the future value of the retirement account 30 years from today....

Answered: 1 week ago

Question

★★★★★
3. Analyzing a Film. View a feature film or a video (e.g., Chir-raq or Brooklyn) and assume the position of a researcher. Analyze the cultural meanings in the film from each of the three...

Answered: 1 week ago

Question

★★★★★
1. Becoming Culturally Conscious. One way to understand your cultural position within the United States and your own cultural values, norms, and beliefs is to examine your upbringing. Answer the...

Answered: 1 week ago

Question

★★★★★
b. Why were these values considered important?

Answered: 1 week ago

Previous Question Next Question