Kelly invested in two stocks. She put 22% into stock A, which has an expected return of 7.3%, and the rest into stock B, with an expected return of 18.9%. What is the expected return of her portfolio? (Note: Round your answer to 3 decimal places. For example, if your answer is 8.7%, you should write 0.087 in the answer box. DO NOT write 8.7 in the box as you will be marked wrong).

Kelly invested in two stocks. She put 22% into stock A, which has an expected return of 7.3%, and the rest into stock B, with an expected return of 18.9%. What is the expected return of her portfolio? (Note: Round your answer to 3 decimal places. For example, if your answer is 8.7%, you should write 0.087 in the answer box. DO NOT write 8.7 in the box as you will be marked wrong).

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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Similar questions

A person has $25,000 invested in a stock with a beta of 0.6 and another $75,000 invested in a stock with a beta of 2.5. If these are the only two investments in her portfolio, what is her portfolio's beta? Do not round intermediate calculations. Round your answer to two decimal places.
An individual has $39000 invested in Stock A with a beta of 0.5 and another $35000 invested in Stock B with a beta of 1.5. If these are the only two investments in her portfolio, what is her portfolio's beta? (Express your answer to two decimal places. i.e. a beta of one is entered as 1.00).
Suppose Stella invests $20,000 in Facebook stock, and $30,000 in HoneywellInternational stock. She expects a return of 16% for Facebook and 10% for Honeywell. Whatis her portfolio’s expected return? Round your answer to two decimal places.A. 11.50%B. 12.40%C. 13.00%D. 13.60%E. 14.50%
She has $71,000 invested in stock A with a beta of 1.30 and another $56,000 invested in stock B with a beta of .60. If these are the only two investments in her portfolio, what is her portfolio’s beta?
Mrs. Landis has a 2-stock portfolio with a total value of $530,000. $175,000 is invested in Stock A with a beta of 1.55 and the remainder is invested in Stock B with a beta of 1.25. What is her portfolio's beta?Round your answer to two decimal places. For example, if your answer is $345.6671 round as 345.67 and if your answer is .05718 or 5.7182% round as 5.72. A. 1.17 B. 1.35 C. 1.59 D. 1.27 E. 1.46
An individual has $35,000 invested in a stock which has a beta of 0.8 and $40,000invested in a stock with a beta of 1.4. If these are the only two investments in herportfolio, what is her portfolio’s beta? DO NOT USE EXCEL
You have information on 153 returns of ABC. Among these, the lowest 10 returns are: Return -21% -22% -35% -38% -39% -45% -54% -56% -64% -68% Rank (Highest to Lowest) 144 145 146 147 148 149 150 151 152 153 Amber has currently $587,414 invested in stocks of ABC. What is Amber's VaR at the 4% level? (i.e., the amount she could lose). Should be a negative number. Note: round to the nearest return before computing the $ amount.
Debra is an investor just starting out in the stockmarket. She starts with a purchase of $10,000 of shares in ABC Ltd which has a standard deviation of returns of 10% p.a. She then invests another $10,000 purchasing shares in XYZ Ltd which has a standard deviation of returns of 40% p.a.. She estimates that the standard deviation of returns of their portfolio has increased from 10% p.a. before the XYZ purchase to 22% p.a. after the purchase. Which of the following statements correctly describe what has happened (or could have happened) to the risk position of Debra’s portfolio following the investment in XYZ? Group of answer choices Debra has not experienced any diversification benefit The maximum diversification benefit that Debra could expect is if the correlation coefficient between the returns of the two assets is equal to zero More than one of the other statements is correct Debra would only achieve a diversification benefit if the correlation coefficient between the returns of ABC…
Jenny has no assets, but she has $1,000 to invest in one of two stocks. Stock A has a beta of 1.2 and a sigma of 0.2. Stock B has a beta of 1.0 and a sigma of 0.3. If the market prices the stocks according to CAPM, which stock should you recommend? " B Neither one A Depends on the correlation between each of these stocks and the market portfolio Indifferent between these stocks please answer asap
Rachel is a financial investor who actively buys and sells in the securities market. Now she has a portfolio of all blue chips, including: $13 500 of Share A, $7600 of Share B, $14 700 of Share C, and $5 500 of Share D. Required:a) Compute the weights of the assets in Rachel’s portfolio?b) If Rachel’s portfolio has provided her with returns of 9.7%, 12.4%, - 5.5% and 17.2% over the past four years, respectively. Calculate the geometric average return of the portfolio for this period. c) Assume that expected return of the stock A in Rachel’s portfolio is 13.6% this year. The risk premium on the stocks of the same industry are 4.8%, betas of these stocks is 1.5 and the inflation rate was 2.7%. Calculate the risk-free rate of return using Capital Market Asset Pricing Model (CAPM).d) Following is forecast for economic situation and Rachel’s portfolio returns next year, calculate the expected return, variance and standard deviation of the portfolio.State of economyMild Recession…
An individual has $3500 invested in a stock that has a beta of 0.8 and $4000 invested in a stock with a beta of 1.4. If these are the only two investments in her portfolio, what is her portfolio’s beta?
Rachel is a financial investor who actively buys and sells in the securities market. Now she has aportfolio of all blue chips, including: $13,500 of Share A, $7,600 of Share B, $14,700 of Share C, and$5,500 of Share D.Required:(a) Assume that expected return of the stock A in Rachel’s portfolio is 13.6% this year. The risk premium on the stocks of the same industry are 4.8%, betas of these stocks is 1.5 and the inflationrate was 2.7%. Calculate the risk-free rate of return using Capital Market Asset Pricing Model (CAPM). (b) Following is forecast for economic situation and Rachel’s portfolio returns next year, calculate theexpected return, variance and standard deviation of the portfolio. State of economy Probability Rate of returnsMild Recession 0.35 - 5%Growth 0.45 15%Strong Growth 0.20 30%

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