Homework Answers
Risk means = Sysytematic Risk and Un SYstematic Risk
Beta Measures Systematic Risk. Bett 2 means Systematic Risk of Company is 2 times of Systematic Risk of Market.
Option B is correct.
Part B:
Expected Ret = Rf + Beta [ Rm - Rf ]
0.08 = Rf + 0.8 [ 0.092 - Rf ]
0.08 = Rf + 0.0736 - 0.8*Rf
= 0.0736 + 0.2* Rf
0.2 * Rf = 0.08 - 0.0736
= 0.0064
Rf = 0.0064 / 0.2
= 0.032 i.e 3.2%
Risk Free Rate is 3.2%
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a. Calculate the portfolio beta on the basis of the original
cost figures (please show how)
b. Calculate the percentage return of each asset in the portfolio
for the year.
c. Calculate the percentage return of the portfolio on the basis
of the original cost, using income and gains during the year
(Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Yearly income $1,000 Value today...
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