If you invest $45,000 in the market index and $30,000 in a risk free investment what is the beta risk of your investment? 0.30 O 0.40 O 0.45 0.60
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- Question 7 The Amelia Knight investment fund has a total capital of R120 000 invested in three shares: SharesReturnInvestedTechnological Sector25%R60 000Education Sector13%R30 000Mining Sector20%R30 000 The current risk-free rate is 5,5%. Market returns have the following estimated probability distribution for the next period: ProbabilityMarket return0,3–10%0,1 14%0,2 15%0,4 18% What is the beta coefficient of the investment fund? 1. 0,52 2. 0,80 3. 1,82 4. 4,92Quantitative Problem: You are holding a portfolio with the following investments and betas: Stock Dollar investment Beta A $250,000 1.30 B 100,000 1.70 C 400,000 0.70 D 250,000 -0.20 Total investment $1,000,000 The market's required return is 11% and the risk-free rate is 4%. What is the portfolio's required return? Do not round intermediate calculations. Round your answer to three decimal places. ? %QUESTION 6 Calculate the expected return for C Inc., which has a beta of 0.8 when the risk-free rate is 0.04 and you expect the market return to be 0.12. a. 8.10 percent b. 9.60 percent c. 10.40 percent d. 11.20 percent e. 12.60 percent
- Stock Dollar investment Beta A $300,000 1.20 B 200,000 1.60 C 500,000 0.65 D 0 -0.20 Total investment $1,000,000 The market's required return is 10% and the risk-free rate is 3%. What is the portfolio's required return? Do not round intermediate calculations. Round your answer to three decimal places.QUESTION 10 An investor wishes to construct a portfolio by borrowing 35 percent of his original wealth and investing all the money in a stock index. The return on the risk-free asset is 4.0 percent, and the expected return on the stock index is 15 percent. Calculate the expected return on the portfolio. a. 9.50 percent b. 18.25 percent c. 11.15 percent d. 15.00 percent e. 18.85 percentQ1: a) Use the basic equation for the capital asset pricing model (CAPM) to Find the risk-free rate for a firm with a required return of 15% and a beta of 1.25 when the market return is 14% b) Find the beta of a portfolio of three stocks. One third of the portfolio is invested in each of the stocks. The stocks and their betas are as follows: Mallmart, beta 1.10; Peak Power Co., beta 0.85; and Micro Ease, beta 1.40.
- Quantitative Problem: You are holding a portfolio with the following investments and betas: Stock Dollar investment Beta A $300,000 1.3 B 200,000 1.6 C 500,000 0.75 D 0 -0.15 Total investment 1,000,000 The market's required return is 11% and the risk-free rate is 3%. What is the portfolio's required return? Round your answer to 3 decimal places. Do not round intermediate calculations.%You are holding a portfolio with the following investments and betas: Stock Dollar investment Beta А $250,000 1.25 B 200,000 1.70 с 400,000 0.85 D 150,000 -0.25 Total investment $1,000,000 The market's required return is 10% and the risk-free rate is 3%. What is the portfolio's required return? Do not round intermediate calculations. Round your answer to three decimal places. %A4 5a Consider the following information on three stocks in four possible future states of the economy: Rate of return if state occurs State of economy Probability of state of economy Stock A Stock B Stock C Boom 0.3 0.35 0.45 0.38 Good 0.3 0.15 0.20 0.12 Poor 0.3 0.05 –0.10 –0.05 Bust 0.1 0.00 –0.30 –0.10 a. Your portfolio is invested 30% in A, 50% in B, and 20% in C. What is the expected return of your portfolio?
- Q12 You hold the positions in the table below. Price Shares Beta Amazon.com $ 40.80 100 3.8 Family Dollar Stores 30.10 150 1.2 McKesson Corp. 57.40 75 0.4 Schering-Plough Corp. 23.80 200 0.5 What is the beta of your portfolio? (Do not round intermediate calculations and round your final answer to 2 decimal places.) PORTFOLIO BETA. % If you expect the market to earn 12 percent and the risk-free rate is 3.5 percent, what is the required return of the portfolio? (Do not round intermediate calculations and round your final answer to 2 decimal places.) REQUIRED RETURN. %Question 6 Suppose that an investor has £1,000,000 to invest in a portfolio containing stocks A, B and a risk-free asset. The investor must invest all her money, and she is using the Capital Asset Pricing Model (CAPM) to make predictions of the expected return-beta relationship. Her objective is to create a portfolio that has an expected return of 14% and which has a beta of 0.75. If stock A has an expected return of 30% and a beta of 1.9, stock B has an expected return of 20% and a beta of 1.4, and the risk-free rate is 8%, how much money will she invest in stock A? Explain your answer and show your calculations.Question 1 e) As a risk averse investor Lawrence will only invest in the portfolio if it has a coefficient of variation that is below 0.75. Should Lawrence invest in the portfolio, please provide reason(s) to support your response? f) Assume in 2020 the estimated rate of return of the T&T Stock Exchange Composite Index for the upcoming year was 8%, and the estimated return on a 1-year treasury note for the upcoming year was 2%. Using the beta of each security shown in Table 1 above and the market expected returns calculate an expected rate of return for each security