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

Question

1 Approved Answer

UPS, a delivery services company, has a beta of 1.6, and Wal-Mart has a beta of 0.7. The risk-free rate of interest is 4% and

image text in transcribed
UPS, a delivery services company, has a beta of 1.6, and Wal-Mart has a beta of 0.7. The risk-free rate of interest is 4% and the market risk premium is 8%. What is the expected return on a portfolio with 30% of its money in UPS and the balance in Wal-Mart? O A. 11.52% B. 11.17% C. 12.35% D. 11.76%

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

Blueprint For Success Writing Business Plans For Engineering Startups

Blueprint For Success Writing Business Plans For Engineering Startups

Authors: Maxwell E. Uduafemhe Phd

1st Edition

979-8862953190

More Books

Students also viewed these Finance questions

Question

★★★★★
Identify two items on the income statement that generate income tax expense. What is an income tax saving, and how does it arise?

Answered: 1 week ago

Question

★★★★★
On which of the following products would it be easier to discriminate by the buyers location: newspapers or scientific journals? Explain your answer.

Answered: 1 week ago

Question

★★★★★
Are Fayols Principles of Management relevant to the contemporary fire and emergency services organization?

Answered: 1 week ago

Question

★★★★★
You are on the board of directors of a large German corporation. You are in the years before 2008 when the SEC required all U.S.-listed companies to prepare reports using U.S. GAAP . For several...

Answered: 1 week ago

Question

★★★★★
UPS, a delivery services company, has a beta of 1.6, and Wal-Mart has a beta of 0.7. The risk-free rate of interest is 4% and the market risk premium is 8%. What is the expected return on a portfolio...

Answered: 1 week ago

Question

★★★★★
1. The market value of the stocks of Shine Corporation at the beginning of year 1 is $120 per share, at the beginning of year 2 is $ 130. It declares dividends of $ 20 per share a) What is the...

Answered: 1 week ago

Question

★★★★★
Palesa Ltd uses the following information to prepare for a retailer's next budget period for June, 2021. Sales (M160 000), Closing stock (M18 700), Closing debtors (M19 400), Opening debtors (M27...

Answered: 1 week ago

Question

★★★★★
Calculate EPS of Solid Ltd. and Sound Ltd. assuming (a)2% Before Tax return on Assets, (b) 10% Before Tax return on Assets on the basis of the following data. Total Assets Equity Share Capital Sound...

Answered: 1 week ago

Question

★★★★★
Assume that you have a sample of n = 8, with the sample mean X = 49, and a sample standard deviation of S = 6, and you have an independent sample of n = 16 from another population with a sample mean...

Answered: 1 week ago

Question

★★★★★
Based on the transaction analysis table provided, choose any three letters from (b) to (l) and based on the effect on the accounting equation, you are to write ANY 3 transactions that occurred during...

Answered: 1 week ago

Question

★★★★★
+ (1,2) (2,0) (-1,-2) (3,-2) (-4,-3) Graph of f The graph of the function f above consists of three line segments. (a) Let g be the function given by g(x) = f(t)dt. For each of g(-1), g'(-1), and...

Answered: 1 week ago

Previous Question Next Question