ZuoTi.Pro
Question

Calculating expected return of a stock portfolio

Stock J has a beta of 1.19 and an expected return  of 12.95 percent, while the stock K has a beta of 0.84, and expected return of 10.40 percent. You want a portfolio with the same risk as the market. How much you will invest in each stock? What is expected return of your portfolio?


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

Homework Answers

Request Professional Answer

Request Answer!

We need at least 10 more requests to produce the answer.

0 / 10 have requested this problem solution

The more requests, the faster the answer.

Request! (Login Required)

All students who have requested the answer will be notified once they are available.
Know the answer?
Add Answer to:
Calculating expected return of a stock portfolio
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

Similar Homework Help Questions

  • Stock J has a beta of 1.23 and an expected return of 13.25 percent, while Stock...

    Stock J has a beta of 1.23 and an expected return of 13.25 percent, while Stock K has a beta of .84 and an expected return of 10.60 percent. You want a portfolio with the same risk as the market. a. What is the portfolio weight of each stock? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., .1616.) b. What is the expected return of your portfolio? (Do not round intermediate calculations and enter...

  • Problem 11-23 Calculating Portfolio Weights [LO 1] Stock J has a beta of 1.22 and an...

    Problem 11-23 Calculating Portfolio Weights [LO 1] Stock J has a beta of 1.22 and an expected return of 13.26 percent, while Stock K has a beta of .77 and an expected return of 10.2 percent. You want a portfolio with the same risk as the market. What is the portfolio weight of each stock? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 32.1616.)

  • The risk-free rate is 0%. The market portfolio has an expected return of 20% and a volatility of 20%. You have $100 to invest. You decide to build a portfolio P which invests in both the risk-free investment and the market portfolio.

    The risk-free rate is 0%. The market portfolio has an expected return of 20% and a volatility of 20%. You have $100 to invest. You decide to build a portfolio P which invests in both the risk-free investment and the market portfolio.a. How much should you invest in the market portfolio and the risk-free investment if you want portfolio P to have an expected return of 40%?b. How much should you invest in the market portfolio and the risk-free investment...

  • You have $134,000 to invest in a portfolio containing Stock X, Stock Y, and a risk-free...

    You have $134,000 to invest in a portfolio containing Stock X, Stock Y, and a risk-free asset. You must invest all of your money. Your goal is to create a portfolio that has an expected return of 13 percent and that has only 72 percent of the risk of the overall market. If X has an expected return of 32 percent and a beta of 1.6, Y has an expected return of 20 percent and a beta of 1.2, and...

  • Calculating Portfolio Betas You own a stock portfolio invested 15 percent in Stock Q, 25 percent...

    Calculating Portfolio Betas You own a stock portfolio invested 15 percent in Stock Q, 25 percent in Stock R, 40 percent in Stock S, and 20 percent in Stock T. The betas for these four stocks are . 78, 87, 1.13, and 1.45, respectively. What is the portfolio beta? Calculating Portfolio Betas You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1.29 and the total portfolio is...

  • A mutual fund manager expects her portfolio to earn a rate of return of 9% this...

    A mutual fund manager expects her portfolio to earn a rate of return of 9% this year. The beta of her portfolio is 0.8. If the rate of return available on risk free assets is 4% and you expect the rate of return on the market portfolio to be 11%. Should you invest in this mutual fund? Show your work. Suppose you want to create a portfolio with the same risk as the fund manager’s portfolio above, however you only...

  • You have $10,000 to invest in a portfolio containing Stock R, Stock S, and a risk-free...

    You have $10,000 to invest in a portfolio containing Stock R, Stock S, and a risk-free asset. You must invest all of your money. Your goal is to create a portfolio that has an expected return of 15% and that has only 120% of the risk of the overall market. If Stock R has an expected return of 25% and a beta of 1.6, Stock S has an expected return of 17.5% and a beta of 1.3, and the risk-free...

  • 8-3a Expected Portfolio Returns Calculate the expected return of the portfolio based on the following individual...

    8-3a Expected Portfolio Returns Calculate the expected return of the portfolio based on the following individual investments and its percentage of the total portfolio. Expected Return Weight -5.4% 10% 3% 23% 3.9% 20% 10% 0% 50% 20% B. 8-3b Portfolio Risk Based on the expected portfolio retums below, te expected return for the portfolio is 5.8% (you can check this). Calculate the standard deviation of the following portfolio: Expected Return Probability 10% 1% 8-3e Beta-Part 1 Returns on technology stocks...

  • You have $10,000 to invest in a portfolio containing Stock R, Stock S, and a risk-free...

    You have $10,000 to invest in a portfolio containing Stock R, Stock S, and a risk-free asset. You must invest all of your money. Your goal is to create a portfolio that has an expected return of 15% and that has only 120% of the risk of the overall market. If Stock R has an expected return of 25% and a beta of 1.6, Stock S has an expected return of 17.5% and a beta of 1.3, and the risk-free...

  • Analyzing a Portfolio: You have $100,000 to invest in a portfolio containing Stock X and Stock...

    Analyzing a Portfolio: You have $100,000 to invest in a portfolio containing Stock X and Stock Y. Your goal is to create a portfolio that has an expected return of18.5 percent. If Stock X has an expected return of 17.2 percent and a beta of 1.4, and Stock Y has an expected return of 13.6 percent and a beta of 0.95, how muchmoney will you invest in Stock Y? How do you interpret your answer? What is the beta of...

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