ZuoTi.Pro
Question

1

What must be the beta of a portfolio with Elrp) = 17%, if ! €= 5% and Elry) = 15%? (Do not round intermediate calculations. R

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Expected return=risk free rate+beta*(market rate-risk free rate)

17=5+Beta*(15-5)

Beta=(17-5)/(15-5)

=1.20

0 0
Add a comment
Know the answer?
Add Answer to:
1 What must be the beta of a portfolio with Elrp) = 17%, if ! €=...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • What must be the beta of a portfolio with Elip) = 17.4%, if re= 3% and...

    What must be the beta of a portfolio with Elip) = 17.4%, if re= 3% and Elrm = 15%? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Beta of a portfolio

  • You have a portfolio with a beta of 1.08. What will be the new portfolio if...

    You have a portfolio with a beta of 1.08. What will be the new portfolio if you keep 88 percent of your money in the old portfolio and 12 percent in a stock with a beta of 0.51? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

  • You have a portfolio with a beta of 1.20. What will be the new portfolio beta...

    You have a portfolio with a beta of 1.20. What will be the new portfolio beta if you keep 87 percent of y money in the old portfolio and 13 percent in a stock with a beta of 0.66? (Do not round intermedia calculations. Round your final answer to 2 decimal places.) New portfolio beta

  • 1. You own a stock portfolio invested 30 percent in Stock Q, 25 percent in Stock...

    1. You own a stock portfolio invested 30 percent in Stock Q, 25 percent in Stock R, 25 percent in Stock S, and 20 percent in Stock T. The betas for these four stocks are 0.80, 1.18, 1.19, and 1.36, respectively. What is the portfolio beta? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) what is the Portfolio beta ? 2. A stock has a beta of 0.95, the expected return on the market is...

  • Part A) You have been managing a $5 million portfolio that has a beta of 1.25...

    Part A) You have been managing a $5 million portfolio that has a beta of 1.25 and a required rate of return of 8.875%. The current risk-free rate is 2%. 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. Part B) Carnes Cosmetics Co.'s stock price is...

  • QUESTION 17 You own a portfolio equally invested in a risk-free asset and two stocks. One of the stocks has a beta...

    QUESTION 17 You own a portfolio equally invested in a risk-free asset and two stocks. One of the stocks has a beta of 126 and the total portfolio is equally as risky as the market. Required: What must the beta be for the other stock in your portfolio? (Round your answer to 2 decimal places leg.32.16).) Beta: QUESTION 18 A stock has a beta of o92, the expected return on the market is 103 percent, and the risk-free rate is...

  • Suppose that a portfolio consists of the following stocks: Stock Amount Beta Chevron $20,000 0.55 General...

    Suppose that a portfolio consists of the following stocks: Stock Amount Beta Chevron $20,000 0.55 General Electric 55,000 1.40 Whirlpool 25,000 1.20 The risk-free rate ( ) is 6 percent and the market risk premium ( ) is 8.4 percent. Determine the beta for the portfolio. Round your answer to two decimal places. Determine how much General Electric stock one must sell and reinvest in Chevron stock in order to reduce the beta of the portfolio to 1.00. Do not...

  • Subject: PORTFOLIO BETA A mutual fund manager has a $20 million portfolio with a beta of...

    Subject: PORTFOLIO BETA A mutual fund manager has a $20 million portfolio with a beta of 0.75. The risk-free rate is 4.00%, and the market risk premium is 5.0%. The manager expects to receive an additional $5 million, which she plans to invest in a number of stocks. After investing the additional funds, she wants the fund's required return to be 19%. What should be the average beta of the new stocks added to the portfolio? Do not round intermediate...

  • PORTFOLIO BETA A mutual fund manager has a $20 million portfolio with a beta of 2.00....

    PORTFOLIO BETA A mutual fund manager has a $20 million portfolio with a beta of 2.00. The risk-free rate is 7.50%, and the market risk premium is 6.5%. The manager expects to receive an additional $5 million, which she plans to invest in a number of stocks. After investing the additional funds, she wants the fund's required return to be 19%. What should be the average beta of the new stocks added to the portfolio? Do not round intermediate calculations....

  • You own a stock portfolio invested 35 percent in Stock Q, 25 percent in Stock R,...

    You own a stock portfolio invested 35 percent in Stock Q, 25 percent in Stock R, 25 percent in Stock S, and 15 percent in Stock T. The betas for these four stocks are .83, 1.21, 1.22, and 1.39, respectively. What is the portfolio beta? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Portfolio beta A stock has an expected return of 12.4 percent, the risk-free rate is 4.5 percent, and the market...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT