SECTION B Instruction: Complete ALL questions from this section. 3/5 Question 1 Suppose you are the money manager of a $2 million investment fund. The fund consists of four stocks with the following investments and betas. Stocks Investment Beta JBG $ 200,000 1.50 GRACE $ 300,000 -0.50 LASD $ 500,000 1.25 HBN $1,000,000 0.75 The current risk-free rate of return is 6.5% and the expected return on the market portfolio is 16%. Required: A. Compute the required rate of return for EACH stock using the Capital Asset pricing Model. B. Compute the Expected Return of the portfolio. C. Compute the Portfolio Beta.

SECTION B Instruction: Complete ALL questions from this section. 3/5 Question 1 Suppose you are the money manager of a $2 million investment fund. The fund consists of four stocks with the following investments and betas. Stocks Investment Beta JBG $ 200,000 1.50 GRACE $ 300,000 -0.50 LASD $ 500,000 1.25 HBN $1,000,000 0.75 The current risk-free rate of return is 6.5% and the expected return on the market portfolio is 16%. Required: A. Compute the required rate of return for EACH stock using the Capital Asset pricing Model. B. Compute the Expected Return of the portfolio. C. Compute the Portfolio Beta.

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter3: Data Visualization

Section: Chapter Questions

Problem 6P: The file MutualFunds contains a data set with information for 45 mutual funds that are part of the...

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The file MutualFunds contains a data set with information for 45 mutual funds that are part of the Morningstar Funds 500. The data set includes the following five variables: Fund Type: The type of fund, labeled DE (Domestic Equity), IE (International Equity), and FI (Fixed Income) Net Asset Value (): The closing price per share Five-Year Average Return (%): The average annual return for the fund over the past five years Expense Ratio (%): The percentage of assets deducted each fiscal year for fund expenses Morningstar Rank: The risk adjusted star rating for each fund; Morningstar ranks go from a low of 1 Star to a high of 5 Stars. a. Prepare a PivotTable that gives the frequency count of the data by Fund Type (rows) and the five-year average annual return (columns). Use classes of 09.99, 1019.99, 2029.99, 3039.99, 4049.99, and 5059.99 for the Five-Year Average Return (%). b. What conclusions can you draw about the fund type and the average return over the past five years?
Please show working Please answer ALL OF QUESTIONS 1 AND 2 1. Suppose you are the money manager of a $4.95 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $ 280,000 1.50 B 460,000 (0.50) C 1,260,000 1.25 D 2,950,000 0.75 If the market's required rate of return is 8% and the risk-free rate is 4%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places. 2. Madsen Motors's bonds have 13 years remaining to maturity. Interest is paid annually; they have a $1,000 par value; the coupon interest rate is 10%; and the yield to maturity is 5%. What is the bond's current market price? Round your answer to the nearest cent.
Suppose you are the money manager of a $4.82 millioninvestment fund. The fund consists of four stocks with the following investments and betas:Stock Investment BetaA $ 460,000 1.50B 500,000 (0.50)C 1,260,000 1.25D 2,600,000 0.75If the market’s required rate of return is 8% and the risk-free rate is 4%, what is the fund’s required rate of return?
Suppose you are the money manager of a $4.82 millioninvestment fund. The fund consists of four stocks with the following investments and betas:Stock Investment BetaA $ 460,000 1.50B 500,000 (0.50)C 1,260,000 1.25D 2,600,000 0.75 If the market’s required rate of return is 8% and the risk-free rate is 4%, what is the fund’srequired rate of return?8-8 BETA COEFFICIENT Given t
2. Suppose you are the money manager of a $4.96 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $ 580,000 1.50 B 800,000 (0.50) C 980,000 1.25 D 2,600,000 0.75 If the market's required rate of return is 11% and the risk-free rate is 5%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places.
Suppose you are the money manager of a $4.92 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $ 560,000 1.50 B 400,000 (0.50 ) C 1,260,000 1.25 D 2,700,000 0.75 If the market's required rate of return is 8% and the risk-free rate is 6%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places. Suppose you are the money manager of a $4.92 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $ 560,000 1.50 B 400,000 (0.50 ) C 1,260,000 1.25 D 2,700,000 0.75 If the market's required rate of return is 8% and the risk-free rate is 6%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places.
Suppose you are the money manager of a $4.07 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $ 380,000 1.50 B 600,000 (0.50) C 1,140,000 1.25 D 1,950,000 0.75 If the market's required rate of return is 12% and the risk-free rate is 6%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places. Calculate the required rate of return for Mudd Enterprises assuming that investors expect a 3.9% rate of inflation in the future. The real risk-free rate is 2.0%, and the market risk premium is 5.0%. Mudd has a beta of 2.7, and its realized rate of return has averaged 13.0% over the past 5 years. Round your answer to two decimal places.
Samantha is the money manager of a R4 000 000 investment fund. The fund consists of four shares with the following investments and betas Share. Investment Beta Class A share R400 000 1,50 Class B share R600 000 -0,50 Class C share R1 000 000 1,25 Class D share R2 000 000 0,75 If the market required rate of return is 14% and the risk-free rate is 6%, what is the fund’s required rate of return? 1. 11,90% 2. 12,10% 3. 13,30% 4. 14,67%
Suppose you are the money manager of a $5.26 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $ 580,000 1.50 B 800,000 (0.50) C 980,000 1.25 D 2,900,000 0.75 If the market's required rate of return is 9% and the risk-free rate is 5%, what is the fund's required rate of return?
Suppose you are the money manager of an Rs.8 million investment fund. The fund consists of 4 stocks with the following investments and betas: Stock Investment Beta A Rs.800,000 1.2 B 1200,000 (0..3) C 2,000,000 1.0 D 4,000,000 0.6 If the market required rate of return is 13.5 percent and the risk-free rate is 5.5 percent, what is the fund's required rate of return? Change the weightages of the investments with your own consent to increase the rate of return and also interpret your answer in a logica
Consider that 2 investment funds exist. ABC Fund(invested in 50% normal stock and 50% risky bonds) and 123 Fund(invested in 25% High risk stock and 75% normal bonds). Assume you have the following historical data of annual returns: Return S.D. Normal Stock 8% 20% Risky Bonds 10% 35% High Risk Stock 14% 40% Normal Bonds 6% 10% A) If Normal Stock and Risky Bonds have a correlation coefficient of 0.4 and High Risk Stock and Normal Bonds have correlation coefficient of 0 .2. Find the expected return and standard deviation of each Fund. B) Consider that 2 investment funds exist. ABC Fund(invested in 50% normal stock and 50% risky bonds) and 123 Fund(invested in 25% High risk stock and…
Suppose a mutal fund has total assets of $25500000 and liabilities of 2100000. Currently there are 10200000 shares outstanding. Determine the net asset value of the fund? Round to the nearest cent