You own a portfolio that is 28 percent invested in Stock X, 43 percent in Stock Y, and 29 percent in Stock Z. The expected returns on these three stocks are 9 percent, 12 percent, and 14 percent, respectively. What is the expected return on the portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Expected return %
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![Problem 11-3 Portfolio Expected Return [LO 1]
You own a portfolio that is 28 percent invested in Stock X, 43 percent in Stock Y, and 29
percent in Stock Z. The expected returns on these three stocks are 9 percent, 12
percent, and 14 percent, respectively. What is the expected return on the portfolio? (Do
not round intermediate calculations and enter your answer as a percent rounded to 2
decimal places, e.g., 32.16.)
Expected return
%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fca0ee9f0-26a0-4b69-a817-d7c752512585%2F1dbdb9ae-2f31-45a0-8dda-a96de9355f5d%2Froxd39h_processed.jpeg&w=3840&q=75)
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- Ch. 11. You own a portfolio that is 25 percent invested in Stock X, 35 percent in Stock Y, and 40 percent in Stock Z. The expected returns on these three stocks are 8 percent, 12 percent, and 17 percent, respectively. What is the expected return on the portfolio? Format as a percent and round to one place past the decimal point as "XX.X"11.10 Calculating Portfolio Betas You own a stock portfolio invested 20 percent in Stock Q, 30 percent in Stock R, 15 percent in Stock S, and 35 percent in Stock T. The betas for these four stocks are .75, 1.90, 1.38, and 1.16, respectively. What is the portfolio beta?Ch. 11. Using CAPM, A stock has an expected return on 10.7 percent, the risk-free rate is 4.1 percent, and the market risk premium is 6 percent. What must the beta of this stock be? Round to two places past the decimal point as "X.XX"
- Problem 11-25 Portfolio Returns and Deviations [LO 1, 2] Consider the following information on a portfolio of three stocks: State of Economy Probability of State of Economy Stock A Rate of Return Stock B Rate of Return Stock C Rate of Return Boom .13 .02 .32 .50 Normal .55 .10 .22 .20 Bust .32 .16 −.21 −.35 If your portfolio is invested 40 percent each in A and B and 20 percent in C, what is the portfolio’s expected return, the variance, and the standard deviation? Note: Do not round intermediate calculations. Round your variance answer to 5 decimal places, e.g., .16161. Enter your other answers as a percent rounded to 2 decimal places, e.g., 32.16. If the expected T-bill rate is 4.25 percent, what is the expected risk premium on the portfolio? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.Problem 11-23 Analyzing a Portfolio You want to create a portfolio equally as risky as the market, and you have $2,400,000 to invest. Given this information, fill in the rest of the following table: (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) Asset Investment Beta Stock A $360,000 1.00 Stock B $624,000 1.10 Stock C 1.20 Risk-free assetQUESTION 7 An investor wishes to construct a portfolio consisting of a 70 percent allocation to a stock index and a 30 percent allocation to a risk-free asset. The return on the risk-free asset is 4.5 percent, and the expected return on the stock index is 12 percent. Calculate the expected return on the portfolio. a. 16.50 percent b. 17.50 percent c. 14.38 percent d. 9.75 percent e. 8.25 percent
- Problem 13-10 Returns and Standard Deviations [LO1] Consider the following information: State of Economy Probability of State of Economy Rate of Return if State Occurs Stock A Stock B Stock C Boom .15 .37 .47 .27 Good .45 .22 .18 .11 Poor .35 −.04 −.07 −.05 Bust .05 −.18 −.22 −.08 a. Your portfolio is invested 20 percent each in A and C, and 60 percent in B. What is the expected return of the portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b-1. What is the variance of this portfolio? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161.) b-2. What is the standard deviation? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)11.18 Reward-to-Risk Ratios Stock Y has a beta of 1.15 and an expected return of 11.8 percent. Stock Z has a beta of .85 and an expected return of 10.7 percent. If the risk-free rate is 4.5 percent and the market risk premium is 7.1 percent, are these stocks correctly priced?Q 19) Beangrinder Corp. has an expected rate of return on equity next year (ROE1) equal to 12% and a reinvestment rate next year (RIR1), equal to 50%. Beangrinder Corp.'s equity beta is equal to 1 and the company is expected to have an earnings per share next year (EPS1), equal to $3. The long-run risk-free rate is equal to 1% while the stock market risk premium is forecast to equal 7%. What is Beangrinder Corp.'s intrinsic equity value per share equal to: Options - $100 $25 $50 $75
- 16 [Question text] What is the beta of the following portfolio? Stock Amount invested (RM) Security beta A 14,200 1.39 B 23,900 0.98 C 8,400 1.52 Select one: A. 1.01 B. 1.05 C. 1.20 D. 1.1211.12 Using CAPM A stock has a beta of 1.15, the expected return on the market is 11.1 percent, and the risk-free rate is 3.8 percent. What must the expected return on this stock be?Q No 3 Assume you are a portfolio manager at JS Global Capital Ltd. Recently you came across three attractive stocks and want to create a portfolio investment in these three stocks. The details of the stocks are given below: Company name Volatility (Standard deviation) Weight in Portfolio Correlation with the market portfolio Engro Ltd 25% 0.30 0.40 Lucky Cement Ltd 12% 0.30 0.60 FFC Ltd 13% 0.40 0.50 The expected return on the market portfolio is 8% and its volatility is 10%. The risk-free rate based on central bank’s discount rate is 3%. Calculate each of the stock’s expected return and risk (beta) as compared to the market What should be the expected return of the portfolio based on values calculated in part a. Calculate the beta of the portfolio? what does it tells regarding the riskiness of the portfolio?