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Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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  • The following common stocks are available for investment:

COMMON STOCK (Ticker Symbol)

BETA

Nanyang Business Systems (NBS)

1.40

Yunnan Garden Supply, Inc. (YUWHO)

0.80

Bird Nest Soups Company (SLURP)

0.60

Wacho.com! (WACHO)

1.80

Park City Cola Company (BURP)

1.05

Oldies Records, Ltd. (SHABOOM)

0.90

A; If you invest 20 percent of your funds in each of the first three securities, and 15 percent in each of the last two, what is the beta of your portfolio?

B; If the risk-free rate is 8 percent and the expected return on the market portfolio is 14 percent, what will be the portfolio’s expected return?

Question 3. +The following common stocks are available for investment: COMMON STOCK (Ticker Symbol) BETA Nanyang Business Systems (NBS) 1.40 Yunnan Garden Supply, Inc. (YUWHO) 0.80 Bird Nest Soups Company (SLURP) Wacho.com! (WACHO) 0.60 1.80 Park City Cola Company (BURP) Oldies Records, Ltd. (SHABOOM) a. If you invest 20 percent of your funds in each of the first three securities, and 15 percent in each of the last two, what is the beta of your portfolio? b. If the risk-free rate is 8 percent and the expected return on the market portfolio is 14 percent, what will be the portfolio's expected return? 1.05 0.90
Transcribed Image Text:Question 3. +The following common stocks are available for investment: COMMON STOCK (Ticker Symbol) BETA Nanyang Business Systems (NBS) 1.40 Yunnan Garden Supply, Inc. (YUWHO) 0.80 Bird Nest Soups Company (SLURP) Wacho.com! (WACHO) 0.60 1.80 Park City Cola Company (BURP) Oldies Records, Ltd. (SHABOOM) a. If you invest 20 percent of your funds in each of the first three securities, and 15 percent in each of the last two, what is the beta of your portfolio? b. If the risk-free rate is 8 percent and the expected return on the market portfolio is 14 percent, what will be the portfolio's expected return? 1.05 0.90
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