Required return=risk free rate+beta*(market rate-risk free rate)
Currently:
15=5+1.5*(Market rate-5)
(15-5)=1.5*(Market rate-5)
Market rate=(15-5)/1.5+5
=11.67%(Approx).
Hence required rate for $500,000=5+1.15*(11.67-5)
=12.67%(Approx).
Required rate for portfolio=Respective rate*Respective weight
=(5,000,000/5,500,000*15)+(500,000/5,500,000*12.67)
=14.79%(Approx).
Problem 8-16 CAPM and portfolio return You have been managing a $5 million portfolio that has...
Problem 8-16 CAPM and portfolio return You have been managing a $5 million portfolio that has a beta of 1.40 and a required rate of return of 10%. The current risk-free rate is 3.50%. Assume that you receive another $500,000. If you invest the money in a stock with a beta of 1.75, what will be the required return on your $5.5 million portfolio? Do not round intermediate calculations. Round your answer to two decimal places.
CAPM and portfolio return You have been managing a $5 million portfolio that has a beta of 1.50 and a required rate of return of 14%. The current risk-free rate is 5.00%. Assume that you receive another $500,000. If you invest the money in a stock with a beta of 1.45, what will be the required return on your $5.5 million portfolio? Do not round intermediate calculations. Round your answer to two decimal places.
Subject: CAPM AND PORTFOLIO RETURN You have been managing a $5 million portfolio that has a beta of 1.85 and a required rate of return of 16%. The current risk-free rate is 4.75%. Assume that you receive another $500,000. If you invest the money in a stock with a beta of 1.75, what will be the required return on your $5.5 million portfolio? Do not round intermediate calculations. Round your answer to two decimal places. __%?
CAPM AND PORTFOLIO RETURN You have been managing a $5 million portfolio that has a beta of 1.75 and a required rate of return of 12%. The current risk-free rate is 4.50%. Assume that you receive another $500,000. If you invest the money in a stock with a beta of 1.90, what will be the required return on your $5.5 million portfolio? Do not round intermediate calculations. Round your answer to two decimal places. %
You have been managing a $5 million portfolio that has a beta of 0.85 and a required rate of return of 15.480%. The current risk-free rate is 8%. Assume that you receive another $500,000. If you invest the money in a stock with a beta of 1.15, what will be the required return on your $5.5 million portfolio? Do not round intermediate calculations. Round your answer to two decimal places.
You have been managing a $5 million portfolio that has a beta of 1.45 and a required rate of return of 12.425%. The current risk-free rate is 3%. Assume that you receive another $500,000. If you invest the money in a stock with a beta of 1.15, what will be the required return on your $5.5 million portfolio? Do not round intermediate calculations. Round your answer to two decimal places.
You have been managing a $5 million portfolio that has a beta of 1.20 and a required rate of return of 14%. The current risk-free rate is 4.75%. Assume that you receive another $500,000. If you invest the money in a stock with a beta of 1.15, what will be the required return on your $5.5 million portfolio? Do not round intermediate calculations. Round your answer to two decimal places.
You have been managing a $5 million portfolio that has a beta of 1.95 and a required rate of return of 10.395%. The current risk-free rate is 6%. Assume that you receive another $500,000. If you invest the money in a stock with a beta of 0.85, what will be the required return on your $5.5 million portfolio? Do not round intermediate calculations. Round your answer to two decimal places.
You have been managing a $5 million portfolio that has a beta of 1.35 and a required rate of return of 7.725%. The current risk-free rate is 3%. Assume that you receive another $500,000. If you invest the money in a stock with a beta of 1.05, what will be the required return on your $5.5 million portfolio? Do not round intermediate calculations. Round your answer to two decimal places.
You have been managing a $5 million portfolio that has a beta of 0.85 and a required rate of return of 7.975%. The current risk-free rate is 5%. Assume that you receive another $500,000. If you invest the money in a stock with a beta of 0.55, what will be the required return on your $5.5 million portfolio? Do not round intermediate calculations. Round your answer to two decimal places. ______ %