Question 6 A portfolio consists of three stocks A, B, and C. $4,700 is invested in Stock A, $4,000 in B, and $9,500 in C. Stock A has a Beta of 1.71, B has 1.33, and C has 0.84. What is the beta of the total portfolio? 1.04 1.17 1.07 1.33 1.01
Q: how long will it take to pay off a loan of $45,000 at an annual rate of 11% compounded monthly if…
A:
Q: Troy Juth wants to purchase new dive equipment for Underwater Connection, his retail store in…
A: Loan installment is that which is paid by borrower to lender for a specified period of time. This…
Q: 1. What is the project NPV?
A: Net Present Value (NPV) is a financial concept widely used in investment analysis and capital…
Q: 3. What is the Macaulay's duration of a bond with a $10,000 face value, 8.5% coupon, 3 years to…
A: Macaulay duration is a metric used to determine the total weighted average time it takes for the…
Q: The pure expectations theory, or the expectations hypothesis, asserts that long-term interest rates…
A: As per our guidelines, we are supposed to answer only 3 sub-parts (if there are multiple sub-parts…
Q: Nungesser Corporation's outstanding bonds have a $1,000 par value, a 10% semiannual coupon, 6 years…
A: Current price of bond is the price which can be paid for purchase of the bond. It is also called…
Q: Arnold Inc. is considering a proposal to manufacture high-end protein bars used as food supplements…
A: Net Present Value (NPV) is a financial metric used to evaluate the profitability of an investment or…
Q: Lingenburger Cheese Corporation has 6.2 million shares of common stock outstanding, 215,000 shares…
A: We need to use weighted average cost of capital(WACC) as the discount rate. WACC is the average cost…
Q: continue indefinitely. If GenElec's equity cost of capital is 11%, then the value of a share of…
A: The constant growth model is a stock valuation method used in finance to determine a stock's…
Q: 14. Smart Tabitha has set up a retirement savings account. She has arranged to have $110 taken out…
A: The time value of money is a foundational concept of finance that is used to value the investments'…
Q: Seven years ago, a semi-annual coupon bond with a 10% coupon rate, $1,000 face value and 15 years to…
A: Price of bond is the present value of coupon payments plus present value of the par value of the…
Q: Question 4: Your broker faxed you the following information on two semiannual coupon bonds that you…
A: Solution:-Bond price means the price at which a bond is trading in the market. It is the summation…
Q: Image assessment surveys are an example of predictive research designs. True False
A: In this question, we are required to determine whether the statement is true or false.
Q: Also i need to learn Account Because i work the Business . And that why i need to learn something…
A: Learning accounting is a commendable endeavor, especially for someone actively involved in business…
Q: Anderson Inc has total assets of $18,797, current assets of $3,777, current liabilities of $4,999…
A: Solution:Long term debt refers to the borrowings made by the company which are payable after a…
Q: Consider the following information: State of Economy Recession Boom Probability of Portfolio Return…
A: In this question, we are required to determine the expected return.
Q: Your portfolio consists of $75,536 invested in a stock that has a beta-1.2, $85,280 invested in a…
A: The risk-free rate is 2.6%.Last year's required return is 10.3%.The market risk premium is increased…
Q: If you invest $4,874 in a long-term venture, you will receive $1,035 per year forever. Assuming your…
A: Formula to calculate the capitalized worth of investment is:CW = A/iwhere CW is the capitalized…
Q: Super Charged Corp.'s free cash flows are forecast to be $106 million in one year. $295 million in…
A: Free cash flow in year 1 = $106 millionFree cash flow in year 2 = $295 millionFree cash flow in year…
Q: Oakmont Company has an opportunity to manufacture and sell a new product for a four-year period. The…
A: Npv is also known as Net present value.. It is a capital budgeting technique which helps in decision…
Q: 1) What is the price of all of the securities now? 2) What will be the price of the securities at…
A: A bond's price is determined by the bond's future cash flows, which include periodic interest…
Q: You are a manager at Percolated Fiber, which is considering expanding its operations in synthetic…
A: Free cash flow is that amount which is earned by the investor from the project. It is the net amount…
Q: Lender Steven Yang Shepherd Bailey Amount $4,194,670 $3,446,268 $2,669,973 $1,389,089 Interest Rate…
A: Weighted average cost of capital (WACC):The weighted average cost of capital (WACC) is a key metric…
Q: Chartreuse Co. has purchased a brand new machine to produce its High Flight line of shoes. The…
A: Break Even Units is that sales of units at which an investor will recover his total cost without any…
Q: Gabrielle secured a 3-year car loan at 5.90% compounded annually that required him to make payments…
A: Present Value represents the value of a future amount in today's dollars, taking into account…
Q: The following table contains prices and dividends for a stock. All prices are after the dividend has…
A: In this question, we are required to determine the realized return. For this, we will take into…
Q: (a) Given spot exchange rate, what is the "right" 2-year forward exchange rate? (b) Is there…
A: The relative worth of two currencies, or the amount of one currency that may be exchanged for one…
Q: Carie purchased a car for $49,000; she paid $4900 as a down payment and financed the balance amount…
A: Present Value= the financed amount after the down payment= 49000-4900= 44100Payment per period can…
Q: hat is the implied growth duration of Bowe Industries given the following: S&P Industrials Bowe…
A: In (Bowe’s P/E ratio / S&P P/E ratio) = Y × In [(1 + Bowe’s average growth + Bowe’s dividend…
Q: Suppose you are evaluating a project with the expected future cash inflows shown in the following…
A: NPV Net Present value refers to the technique of capital budgeting for evaluating various capital…
Q: Bennett Company has a potential new project that is expected to generate annual revenues of $…
A: In this question, we are required to determine the operating cash flow.
Q: Suppose the real risk-free rate is 3.2%, the average future inflation rate is 1.9%, and a maturity…
A: The market interest rate refers to the profit that the market provides. It is calculated based on…
Q: Click on the following icon in order to copy its contents into a spreadsheet.) Cash Flow Today ($…
A: Net present value refers to the method of capital budgeting which is calculated by deducting the…
Q: A corporate bond has 16 years to maturity, a face value of $1,000, a coupon rate of 5.1% and pays…
A: Bond price will be the aggregate of present value of all coupon payments and present value of face…
Q: Heavy Metal Corporation is expected to generate the following free cash flows over the next five…
A: 1.Value of Enterprise valueEnterprise value = Value of equity + Value of debt2.Terminal value is…
Q: The CFO of Yang Centers has asked you to calculate the EPS if the company were to change its capital…
A: Debt = 90% of Total Capital= 90% * 4,000,000= 3,600,000Interest Expenses= Debt * Interest rate=…
Q: You observe the following yield curve for Treasury securities: Maturity Yield 1 Year 2.40% 2 Years…
A: A forward rate is a predicted interest rate for a future period, based on current market conditions.…
Q: The price of a car you want is $39,000 today. Its price is expected to increase by $1000 each year.…
A: The future value of any amount or payment is the worth of the investment at some future date based…
Q: Calculate the market conversion price for a convertible bond with par value of $4000, coupon rate of…
A: The market conversion price is the effective price at which a convertible security, such as a…
Q: Firms HL and LL are identical except for their financial leverage ratios and the interest rates they…
A: Given Here,Invested capital is $15 millionEBIT is $2.25 millionTax rate is 25%Calculation of ROIC…
Q: CrochetCo is considering an investment in a project which would require an initial outlay of…
A: Net present value refers to the capital budgeting technique for evaluating the projects for capital…
Q: Accounting for Bonds Sold at a Discount The Peoples National Bank raised capital through the sale of…
A: The price of a bond is equal to the sum of the present value of coupon payments and the present…
Q: You are considering opening a new plant. The plant will cost $95.3 million upfront and will take one…
A: The NPV of the project refers to the measure of the profitability of the project that is calculated…
Q: The net price of an item after trade discounts of 34.00%, 11.50%, and 5.50% is $1,700.00. a.…
A: Net price after discount = $1700Trade discount = 34%, 11.50%, 5.50%
Q: the accounts payable to 60 days? A) 28.03% OB) 1.7% OC) 12.65%
A: Discount rate=3%Discount period is 15 daysCredit period is 60 days.
Q: After the break in the MCC caused by using up retained earnings, the schedule can be expected to…
A: A key idea in corporate finance is the marginal cost of capital (MCC), which is the price of…
Q: Professor Wendy Smith has been offered the following opportunity: A law firm would like to retain…
A: Internal rate of return:Internal Rate of Return (IRR) is a financial metric used to evaluate the…
Q: Professor Wendy Smith has been offered the following opportunity: A law firm would like to retain…
A: Initial cash inflow = $50000Hourly payment = $555Daily hours = 8Cost of capital = 15%we have to…
Q: A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a…
A: When the weights of the assets are set in such a way as to yield the maximum Sharpe ratio of a given…
Q: Big Pharm corporation has a target capital structure of 35% debt and 65% common equity, with no…
A: A company's average after-tax cost of capital from all sources, including common stock, preferred…
Step by step
Solved in 3 steps with 2 images
- What is the beta of a portfolio comprised of the following securities? Stock Amount Invested Security Beta- 0.86 1.76 1.35 A B C $3600 $ 2800 $ 9000 Beta of portfolio to 2 decimal places is Numeric ResponseIf you hold a portfolio made up of the following stocks: Investment Value Beta Stock X $4,000 1.5 Stock Y $5,000 1.0 Stock Z $1,000 .5 What is the beta of the portfolio? A. 1.00 B. 1.24 C. 1.33 D. 1.15What is the beta of the following two stock portfolio? Security Beta of the security Amount invested A 1.35 $ 20,000 B 0.50 $ 30,000 a. 1.075 b. 1.00 c. 1.19 d. 0.84
- financial advisor evaluates four stocks for inclusion in an investor's portfolio. A orrelation matrix showing each stock's correlation with the other stocks is shown below Stock ALK CMN BTY DLE ALK 0.40 0.58 1.00 -0.25 BTY 0.40 1.00 0.16 -0.04 CMN -.25 .16 1.00 .37 DLE .58 .04 .37 1.00 f the goal is to reduce the investor's overall portfolio risk, which two stocks should the advisor recommend? a. ALK and DLE b. ALK and CMN c. BTY and DLE BTY and CMQn4: Assume a two-stock portfolio created with $50,000 is invested in both HT and Collections. The expected returns are given below: Calculate the portfolio's return for each state of economy and fill them in the last column, under "Portfolio" (Hint: The portfolio's expected return is a weighted average of the returns of the portfolio's component assets). Calculate the portfolio's expected return (Hint: You have to incorporate the probability distribution of each state of economy). Calculate the portfolio's standard deviation. Economy Recession Below average Average Above average Boom Prob. HT 0.1 -27.0% 0.2 -7.0% 0.4 15.0% 0.2 30.0% 0.1 45.0% Coll 27.0% 13.0% 0.0% -11.0% -21.0% PortfolioWhat is the beta of a portfolio comprised of the following securities? Stock Amount Invested Security Beta A $5,100 1.66 B $6,100 1.77 C $8,600 1.00
- Two-Asset Portfolio Stock A has an expected return of 12% and a standard deviation of 40%. Stock B has an expected return of 18% and a standard deviation of 60%. The correlation coefficient between Stocks A and B is 0.2. What are the expected return and standard deviation of a portfolio invested 30% in Stock A and 70% in Stock B?5. Your stock portfolio consists of the following investments: Company A B C Investment A. 1.73 B. 1.88 C. 2.03 D. 2.17 E. 2.40 $ 400 $ 600 $1,000 Standard Deviation 1.5 2.0 3.0 Beta 1.2 1.8 2.2 Expected Return 9% 10% 12% Using the appropriate measure of portfolio risk, calculate your portfolio level of risk.Tiempo restante U:28:23 What is the beta of a portfolio that has $18,400 in Stock M, $6,320 in Stock N, $32,900 in Stock O and $11,850 in Stock P. Their Betas are .97, 1.04, 1.23, and .88, respectivley? O a. 1.04 O b. 1.11 О с. 1.08 O d. 1.15 O e. .99
- What is the standard deviation of a portfolio formed of shares A and B? Asset (A) E(R₂) = 9% SDA = 4% W₁ = 0.4 Select one: A. 4.99% B. 4.56% C. 3.68% D. 5.16 Asset (B) E(R₂) = 11% SDB = 6% WB = 0.6 COVA, B = 0.00119. Portfolio beta and weights Rafael is an analyst at a wealth management firm. One of his clients holds a $10,000 portfolio that consists of four stocks. The investment allocation in the portfolio along with the contribution of risk from each stock is given in the following table: Stock Atteric Inc. (AI) Arthur Trust Inc. (AT) Li Corp. (LC) Transfer Fuels Co. (TF) Investment Allocation O 0.9009 percentage points O 1.4322 percentage points 35% 20% 15% 30% 1.1550 percentage points O 1.3283 percentage points Beta 0.900 1.400 1.100 0.300 O Undervalued Standard Deviation Rafael calculated the portfolio's beta as 0.850 and the portfolio's required return as 8.6750%. Rafael thinks it will be a good idea to reallocate the funds in his client's portfolio. He recommends replacing Atteric Inc.'s shares with the same amount in additional shares of Transfer Fuels Co. The risk-free rate is 4%, and the market risk premium is 5.50%. 23.00% 27.00% According to Rafael's recommendation, assuming that…Donald Gilmore has $100,000 invested in a 2-stock portfolio. $70,000 is invested in Stock X and the remainder is invested in Stock Y. X's beta is 1.50 and Y's beta is 0.70. What is the portfolio's beta? Select the correct answer. a. 1.31 b. 1.36 c. 1.41 d. 1.46 e. 1.26