7. An investor is planning to add a hedge fund to his portfolio. The expected return is 12.8%. The current risk-free rate is 4.3% and the volatility of the portfolio is 9%. What is the Sharpe ratio? O 0.8837 0.9216 0.9444 0.9753
Q: The boom in IPO activity has been mainly credited to the surge in SPACs (special purpose acquisition…
A: SPACs (special purpose acquisition vehicles) are known as blank check companies and such companies…
Q: Inflation and interest rates) Assume the expected inflation rate is 4.4 percent. If the current…
A: Nominal interest rate is interest rate including the inflation and real interest rate.
Q: Stanley, Inc. issues 10-year $1,000 bonds that pay $85 annually. The market price for the bonds…
A: Here, Market price for the bonds = $1,034 To Find: Part A. Present value of the bond =? Part B.…
Q: Consider the following financial statement information for the Hop Corporation: Item Beginning…
A: Accounts payables are those supplier accounts from whom business has made credit purchases but…
Q: What is the firm value
A: EBIT = $20,000 every year in perpetuity Cost of equity (ke) = 15%Tax rate (t) = 40%Debt = NIL…
Q: FALSE O TRUE O An employee at LaserKinetics.com borrows $10,000 on May 1 and must repay a total of…
A: Borrowings are the loan which is taken by the individual to meet its financial requirements. The…
Q: Last year, Bread City had sales of 70,000 loaves resulting in revenues of $350,000. Variable costs…
A: Solution:- Profit means the surplus of revenue over the incurred costs.
Q: National Corporation expects to generate free-cash flows of P300,000 per year for the next five…
A: Answer - Free cash flow From Year 1 to 5 = $300000 Step 1 : Calculation of Cashflow of 6th Year…
Q: The next dividend payment by Modern Building Ltd will be $1.50 per share. The dividends are…
A: We will apply the concept of dividend discount model here. As per the dividend discount model the…
Q: The Cambodian interest rate is 6% and the Vietnam interest rate is 7%. The spot exchange rate of one…
A: Covered interest rate parity is a technique of hedging by taking advantage of the interest rate…
Q: explain Speculative bubbles and crashes
A: We often hear the word speculative bubble in the world of finance and investments. The stock market,…
Q: What is the name principal future value a. b. Ob
A: Annuity refers to a series of payments that are made at equal intervals of time.They can be…
Q: What did LebroJames, Inc. report as Net Cash Flow from Operating Activities for Year 2? What did…
A: Net Cash Flow from Operating Activities: It shows the amount of money/cash being generated by the…
Q: Why is TIME the portfolio manager’s best friend?
A: Portfolio manager: Portfolio managers are specialists that manage investment portfolios in order to…
Q: National Corporation is a no growth firm and has 2 million shares outstanding. It is expected to…
A: To calculate the current value of stock we will use the below formula Current price per share =…
Q: Over the past year (from one year ago to today), the inflation rate was 3.26% the risk-free rate was…
A: We will first calculate the actual rate of return then we will apply the formula to calculate the…
Q: a. How much is the ForEx gain or (loss) on December 31, 2017? b. How much is the outstanding…
A: Data given: Date of invoicing and shipping= December 1, 2017 Date of payment = February 1,2018 JLN's…
Q: (Related to Checkpoint 9.6) (Inflation and interest rates) What would you expect the nominal…
A: Nominal interest rate refers to the interest rate before taking inflation into account. The equation…
Q: Weber Interstate Paving Co. had $450 million of sales and $225 million of fixed assets last year, so…
A: Solution:- When an asset is sold, there is cash inflow due to sale proceeds. On the other hand, when…
Q: Find the present value of the following annuities: 1. 100 payable every month for 10 years if the…
A: Present value is referred as the current value of future sum of funds or the cash streams that are…
Q: One university needs some maintenance. The owner of the university decides to deposit $400000 in an…
A: Present Value : Present worth is that amount which shown present Value of deposit done in future.
Q: Two years after a person put $25,000 in a savings account that paid semiannually compounded interest…
A: Solution:- When an amount is invested somewhere, it earns interest. The amount invested at beginning…
Q: Suppose you construct a strategy based on options on a stock that is currently selling for $100. The…
A: Our Strategy:- Buy one call option at strike price of $95. Sell two calls at strike price of $100.…
Q: With a $100,000 investment in a new injection moulding machine, A-Design Inc., a company specialized…
A: The payback period is the span of time necessary to repay the cost of an investment. Simply…
Q: You bought a split type aircon and decided to avail a buy now, pay later - zero % interest scheme.…
A: Monthly Payment P 3,800.00 Time Period 12 Months Interest rate 0%
Q: Calculate the future value of end-of-month payments of $500 made for 4 years into an investment fund…
A: Future Value of Ordinary Annuity refers to the concept which gives out the compounded or future…
Q: How do Capital Guaranteed Notes function?
A: Capital notes are short term unsecured debts which are generally issued by firms in order to pay…
Q: The payback period for each project The accounting rate of return for each project The net present…
A: Net present value (NPV) of an alternative/project refers to the variance between the initial…
Q: What is venture capital? An angel investor? A private placement?
A: Following the current economic crisis, financial management has become more methodical. Following…
Q: Explain investment banking firm.
A: Investment banking involves enormous sums of money. As a result, there is credit risk, market risk,…
Q: With a $100,000 investment in a new injection moulding machine, A-Design Inc., a company specialized…
A: The payback period is the span of time necessary to repay the cost of an investment. Simply…
Q: ed to Checkpoint 9.2) (Yield to maturity) The Saleemi Corporation's $1,000 bonds pay 8…
A: A yearly return is used to represent YTM which provides us with the projected total return from a…
Q: From a corporation’s point of view, how does preferred stock differ from common stock?
A: Preferred investors have a greater right to distributions (such as dividends) than the common…
Q: On what factors do the interest rate and repayment terms for term loans based?
A: Loan refers to the lending of money by one ore more individuals or organizations . The recipient…
Q: Why would a lender offer unsecured short-term loans when it could demand collateral?
A: When your cash flow is poor, short-term loans give rapid cash. Compared to regular loans, it has a…
Q: On January 1, Zonoz, Inc. issued a 10-year semiannual bond with a face value of $590,000 that pays…
A: As asked in the question to calculate using excel, so we will use the formula in excel and the snip…
Q: Finance Today, a bond has a coupon rate of 12%, par value of $1000, YTM of 9.60%, and semi-annual…
A: Solution:- Current Yield means the ratio of annual coupon payment to the current market price of the…
Q: What is the accumulated value after five years of payments of $20000 made at the beginning of each…
A: Solution:- When an equal amount of payment is made each period at the beginning of period, it is…
Q: Determine the proceeds of the sale on a six- year interest-bearing promissory note for $5,750 at…
A: Future value of present amount With present value (PV), periodic interest rate (r) and period (n),…
Q: aniel Sawyer, the CEO of the Sawyer Group, is initiating planning for the company's operations next…
A: We need to use additional funds needed (AFN) equation below AFN =AS0*∆S -LS0*∆S -P*S1*(R) Where…
Q: Happy Time Inc. is expected to generate the following cash flows for the next year, as shown in the…
A: Debt is one of the form of loan taken by the business. Equity is also one of the source of financing…
Q: 2. What is the actual rate of interest if £4000 deposited for 3 years attracts interest of £1440?
A: As per Bartleby Honor Code, when multiple independent questions are asked, the expert is required…
Q: Required information Pollution control equipment for a pulverized coal cyclone furnace is expected…
A: Given: Furnace cost $190,000 Years 2 Another furnace $120,000 Years 3 Interest rate 9%
Q: A small company purchased a state-of-the-art copier machine in 2012 for $5,995. Five years later…
A: Copier Machine Price in 2012 = $5,995 Copier Machine Price after Five Years = $3,650
Q: 2. Computer for the Net Present Value using the present value of an annuity. Get the value using…
A: Given Information : Year 1 cash flow = ₱3,000 Year 2 cash flow = ₱2,000 Year 3 cash flow = ₱5,000…
Q: Mr Jeffrey wants to renovate his house. He takes a personal loan of RM 45000 from a bank with an…
A: Personal loan amount "PV" is RM 45000 Interest rate is 5% per annum Time period is 6 years To Find:…
Q: To be able to buy a new computer, Donna decides to save for 5 years. She opens a savings account…
A: Simple Interest = P * R * TWhere P = Principal = $400R = Rate of Interest = 3%T = Time = 5 years
Q: Production has indicated that they can produce widgets at a cost of P4.00 each if they lease new…
A: In a production, total benefit comes from sales revenue, which is the units sold times price per…
Q: For a call option of CN¥100,000 with the $0.16 exercise price and $0.0005 premium, When the spot…
A: A call option is a contractual agreement that gives the option buyer the right but not the…
Q: Prokter and Gramble (PG) currently has $25 billion outstanding debt. PG has a cost of equity capital…
A: Earnings before interest and taxes: Earnings before interest, depreciation and taxes are the…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Assuming you are an investor with GHS100 available. If you invest GHS60 and GHS40 in Allos Inc. and Orangus Inc. respectively, what will be your portfolio returns? 4.Calculate the Standard deviation of the portfolio.You are given the following information concerning three portfolios, the market portfolio, and the risk-free asset: Portfolio Y Z Market Risk-free Rp 13.5% бр 35.00% 12.5 30.00 7.1 20.00 10.6 4.4 25.00 0 Вр 1.55 1.20 0.80 1.00 0 Assume that the correlation of returns on Portfolio Y to returns on the market is 0.70. What percentage of Portfolio Y's return is driven by the market? Note: Enter your answer as a decimal not a percentage. Round your answer to 4 decimal places. × Answer is complete but not entirely correct. R-squared 0.9785You are given the following data: Risk-free rate is 4.1 percent, market return is 6.5 per cent, and market volatility is 12.2 per cent. The return of a portfolio is 11 per cent, its volatility is 15.2214 per cent, and its beta is 0.7. Calculate the measure called the Information ratio. A. 0.193 B. 0.414 C. 0.548 D. 4.500
- You are given the following information concerning three portfolios, the market portfolio, and the risk-free asset: 8p 1.70 1.30 0.85 1.00 Portfolio X Y Z Market Risk-free Rp 11.5% 10.5 7.2 10.9 4.6 R-squared op 38.00% 33.00 23.00 28.00 0 Assume that the correlation of returns on Portfolio Y to returns on the market is 0.76. What percentage of Portfolio Y's return is driven by the market? Note: Enter your answer as a decimal not a percentage. Round your answer to 4 decimal places.8. Assume the risk-free rate is 6.7% and the expected return on the market portfolio is 7.8%. Use the capital asset pricing model (CAPM) to find the required return for each of the securities in the table here, 7. Review On Click the icon to see the Worked Solution. The required return for investment A is %. (Round to one decimal place.) The required return for investment B is %. (Round to one decimal place.) The required return for investment C is %. (Round to one decimal place.) The required return for investment D is %. (Round to one decimal place.) The required return for investment E is %. (Round to one decimal place.) 7: Data Table (Click on the icon here in order to copy its contents of the data table below into a spreadsheet.) Security Beta A 1.34 в 0.93 0.13 0.96 E 0.67You are given the following information concerning three portfolios, the market portfolio, and the risk- free asset: Portfolio X Y Z Market Risk-free Rp 14.5% R-squared 13.5 9.1 10.7 5.4 op 36% 31 21 26 0 6p 1.60 1.30 .80 1.00 0 Assume that the correlation of returns on Portfolio Y to returns on the market is 72. What percentage of Portfolio Y's return is driven by the market? (Enter your answer as a decimal not a percentage. Round your answer to 4 decimal places.)
- You are given the following information concerning three portfolios, the market portfolio, and the risk-free asset: Portfolio X Y Z Market Risk-free Rp 11.0% ор 33.00% 10.0 28.00 8.1 10.4 5.2 18.00 23.00 Ө вр 1.45 1.20 0.75 1.00 Ө Assume that the correlation of returns on Portfolio Y to returns on the market is 0.66. What percentage of Portfolio Y's return is driven by the market? Note: Enter your answer as a decimal not a percentage. Round your answer to 4 decimal places. R-squaredSuppose you are the money manager of a P4.0 investment portfolio consists of stocks with the following investment and betas: Stock Beta S 1.5 T (0.50) A 1.25 R 0.75 If the market required return is 14% and the risk free rate is 6%,a) What is the portfolio beta?b) What is the portfolio required rate of return?What are the expected return and the standard deviation of return on in the optimal risky portfolio if an investor lends? O a EG)=14.00 %, o =21.37% Ob. EG)=18.00%, o =27.34% Oc EG)=13.50%, o =25.99% Od E)=14.00%, a =22.67% Oe. EG)=13.50%, o =22.16%
- You are given the following information concerning three portfolios, the market portfolio, and the risk-free asset: Portfolio X Y Z Market Risk-free Rp 14.0% 13.0 .8.5 12.0 7.2 Ор 39.00% 34.00 24.00 29.00 0 Bp 1.50 1.15 0.90 1.00 0 Assume that the correlation of returns on Portfolio Y to returns on the market is 0.90. What percentage of Portfolio Y's return is driven by the market? Note: Enter your answer as a decimal not a percentage. Round your answer to 4 decimal places. R-squaredSuppose Stock A has B = 1 and an expected return of 11%. Stock B has a B = 1.5. The risk- free rate is 5%. Also consider that the covariance between B and the market is 0.135. Assume the CAPM is true. Answer the following questions: a) Calculate the expected return on share B. b) Find the equation of the Capital Market Line (CML). c) Build a portfolio Q with B = 0 using actions A and B. Indicate weights (interpret your result) and expected return of portfolio Q.If the risk-free rate of return is 2.1%, the beta of the mutual fund is 1.7, and the return of market is 5%, what is the required rate of return?
