Question 1 | ||||
Lets assume two stock a and b | ||||
Weight of stocks | ||||
Wa= | 0.5 | |||
Wb= | 0.5 | |||
Beta of stock a (Ba)= | 1.4 | |||
Beta of stock b (Bb)= | 0.7 | |||
Portfolio Beta= | Wa*Ba+ Wb*Bb | |||
= | 0.5*1.4+0.5*0.7 | |||
= | 1.05 | |||
Therfore answer would be 1.05 | ||||
Question 2 | ||||
Total Return= | 15% | |||
Purchase price= | $40 | |||
Capital gain= | 10% | |||
After One Year Price | =$40 +$40*10% | |||
= | $ 44 | |||
Total Return= | Dividen Income+ Capital gain Income ( Year End Price- Purchase Price) | |||
Purchase Price | ||||
15%= | Dividen Income+ ($44-$40) | |||
$40 | ||||
Dividen Income= | $ 2 | |||
Therfore answer would be $2 | ||||
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