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Use the following information to answer the question(s) below. Suppose all possible investment opportunities in the world are limited to the four stocks listed in
Use the following information to answer the question(s) below. Suppose all possible investment opportunities in the world are limited to the four stocks listed in the table below: Price per Stock Share Number of Shares Outstanding (Millions) 25 45 Taggart Transcontinental Rearden Metal Wyatt Oil Nielson Motors $15.60 $13.00 $29.25 $26.25 10 26 Suppose that you are holding a market portfolio and you have invested $9000 in Rearden Metal. The amount that you have invested in Nielson Motors is closest to: $6000. ect Answer $10,500. $9000. $7715. Use the following information to answer the question(s) below. Consider the following information regarding corporate bonds: Rating AAA A BBB BB B CCC Average Default Rate 0.0% 0.1% 0.2% 0.5% 2.2% 5.5% 12.2% Recession Default Rate 0.0% 1.0% 3.0% 3.0% 8.0% 16.0%48.0% Average Beta 0.05 0.05 0.05 0.10 0.17 0.26 0.31 a Wyatt Oil has a bond issue outstanding with seven years to maturity, a yield to maturity of 7.0%, and a BBB rating. The bondholders' expected loss rate in the event of default is 70%. Assuming a normal economy the expected return on Wyatt Oil's debt is closest to: 4.9%. 3.0%. 3.5% Correct Answer 6.7%
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