You want your portfolio beta to be 1.16. Currently, your portfolio consists of $3,000 invested in stock A with a beta of 1.64 and $2,000 in stock B with a beta of 0.75. You have another $5,000 to invest and want to divide it between an asset with a beta of 1.48 and a risk-free asset. How much should you invest in the risk-free asset?
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- An analyst has modeled the stock of a company using the Fama-French three-factor model. The market return is 10%, the return on the SMB portfolio (rSMB) is 3.2%, and the return on the HML portfolio (rHML) is 4.8%. If ai = 0, bi = 1.2, ci = 20.4, and di = 1.3, what is the stock’s predicted return?You want your portfolio beta to be 1.30. Currently, your portfolio consists of $100 invested in stock A with a beta of 1.4 and $300 in stock B with a beta of .6. You have another $400 to invest and want to divide it between an asset with a beta of 1.8 and a risk-free asset. How much should you invest in the risk-free asset?You have a $1,000 portfolio which is invested in stocks A, B, and a risk-free asset. $400 is invested in stock A. Stock A has a beta of 1.33 and stock B has a beta of 0.66. How much needs to be invested in stock B if you want a portfolio beta of 0.94?
- You own a portfolio that has a total value of $150,000 and a beta of 1.32. You have another $61,000 to invest and you would like the beta of your portfolio to decrease to 1.25. What does the beta of the new investment have to be in order to accomplish this? Multiple Choice 1.078 1.138 1.199 1.285 .943You want to create a portfolio equally as risky as the market, and you have $1,200,000 to invest. Consider the following information: Asset Investment Beta Stock A $300,000 0.70 Stock B $360,000 1.25 Stock C 1.55 Risk-free asset Required: (a) What is the investment in Stock C? (Do not round your intermediate calculations.) (b) What is the investment in risk-free asset? (Do not round your intermediate calculations.)You have $122,000 to invest in a portfolio containing Stock X and Stock Y. Your goal is to create a portfolio that has an expected return of 17.6 percent. Stock X has an expected return of 14.0 percent and a beta of 1.26, and Stock Y has an expected return of 9.5 percent and a beta of 1.00. a. How much money will you invest in Stock Y? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. What is the beta of your portfolio?
- Suppose you have a portfolio that has $290 in stock A with a beta of 1.04, $1, 160 in stock B with a beta of1.34, and $870 in the risk-free asset. You have another $580 to invest. You wish to achieve a beta for yourwhole portfolio to be the same as the market beta. What is the beta of the added security?You own a portfolio equally invested in a risk-free asset and two stocks (If one of the stocks has a beta of 0.91 and the total portfolio is equally as risky as the market, what must the beta be for the other stock in your portfolio? (Hint: Remember that the market has a Beta=1; also remember that equally invested means that each asset has the same weight- since there are 3 assets, each asset's weight is 1/3 or 0.3333. Use 0.333333, and not only 0.33, sorry, calculation is sensitive to it). Enter the answer with 4 decimals (e.g. 1.1234)ou want to create a portfolio equally as risky as the market, and you have $900,000 to invest. Consider the following information: Asset Investment Beta Stock A $135,000 0.65 Stock B $270,000 1.35 Stock C 1.50 Risk-free asset Required: (a) What is the investment in Stock C? (Do not round your intermediate calculations.) (Click to select) $298,500 $167,500 $310,440 $283,575 $286,560 (b) What is the investment in risk-free asset? (Do not round your intermediate calculations.) (Click to select) $196,500 $188,640 $204,360 $327,500 $186,675
- You have invested 0.21 percent of your overall money in risk free treasury bills, and the rest of your money equally between stock A that has beta of 1.37 and stock B has beta of 0.04 calculate the risk free of your overall portfolio with risk free and risky asset, give your answer in 0.000.Assume that you manage a $10.00 million mutual fund that has a beta of 1.05 and a 9.50% required return. The risk-free rate is 2.20%. You now receive another $11.50 million, which you invest in stocks with an average beta of 0.82. What is the required rate of return on the new portfolio? (Hint: You must first find the market risk premium, then find the new portfolio beta.)Assume that you have just received information from your investment advisor that your portfolio has reached a value of $1,250,000. Your portfolio consists of three stocks, as follows: Stock Amount Invested % of Total Beta A $250,000 20% 1.12 B $400,000 32% .85 C $600,000 48% .55 Total: $1,250,000 100% Calculate the beta of this investment portfolio. Assume that the expected market return ( r m ) is 9 percent and the expected risk- free rate ( RF ) is 2 percent. What is the expected return ( r j ) for this investment portfolio?