What must be the beta of a portfolio with E(rP) = 14.60%, if rf = 5% and E(rM) = 13%? Hint: Use the equation E(rP) = rf + β[E(rM) – rf]
What must be the beta of a portfolio with E(rP) = 14.60%, if rf = 5%...
Rf=2%, Rm= 10% An equal weighted portfolio of stock X and Rf yields a return of 10% A portfolio of stock Y and Rf with a 75% investment in stock Y yields a return of 6.5% What is the market beta of a portfolio if we invest 40%in X, 20% in Y, 20% in Rf and 20% in the market?
Suppose that CAPM holds. Let Rf denote the risk free rate, E(RM) the expected return of the market portfolio, and sigmaMthe standard deviation of the market portfolio. Now consider some portfolio on the capital market line, with expected return E(R) and standard deviation sigma. What is the beta of this portfolio? Select one: 1. E(R)/sigma 2. sigmaM/sigma 3. sigma/sigmaM 4. E(RM)-Rf
The risk-free rate is 4.5%, the market risk premium = ( E(Rm) - Rf) is 10.1%, and the stock’s beta is 1.3. What is the required rate of return on the stock, E(Ri)? Use the CAPM equation.
2. Company A's stock has a beta of BA 1.5, and Company B's stock has a beta of βΒ-2.5. Expected returns on this two stocks are E [rA]-9.5 and E rB 14.5. Assume CAPM holds. At age 30, you decide to allocate ALL your financial wealth of $100k between stock A and stock B, with portfolio weights wA + wB1. You would like this portfolio to be risky such that Bp- 3 (a) Solve for wA and wB- (b) State...
If Risk free rate (Rf) = 7% market premium (Rm) = 13% Beta = 1.845 What will be Ke ? Please explain how you calculated with steps
1 What must be the beta of a portfolio with Elrp) = 17%, if ! €= 5% and Elry) = 15%? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Beta of a portfolio
Suppose that the risk-free rate is Rf = 2.53% and the risk-premium is E(Rm) − Rf = 7.10%. According to Gordon’s Growth Model, if a company has a current dividend of D0 = $22.33 per share, a constant growth rate of g = 5.24%, and β = 1.21, what is its stock price?
Which one of these conditions must exist if the standard deviation of a portfolio is to be less than the weighted average of the standard deviations of the individual securities held within that portfolio? a. β< 1 b. Rm> 1 c. ρ< 1 d. β = 0 e. ρ >1
Problem 1 You are holding an all-equity (unlevered) portfolio Q with rf-5%, Rm-10%, Rq-109. ơ,-2096. a) What will be the debt-equity of a levered portfolio that will have 30% volatility? b) How much you will borrow if your all-equity portfolio is worth $50,000? c) How much will be invested in the portfolio Q you now hold to create the levered portfolio in part (a)? Problem 1 You are holding an all-equity (unlevered) portfolio Q with rf-5%, Rm-10%, Rq-109. ơ,-2096. a)...
Suppose that there are two independent economic factors, F1 and F2. The risk-free rate is 5%, and all stocks have independent firm-specific components with a standard deviation of 54%. Portfolios A and B are both well-diversified with the following properties: Portfolio Beta on F1 Beta on F2 Expected Return A 1.6 2.0 32 % B 2.6 –0.20 29 % What is the expected return-beta relationship in this economy? Calculate the risk-free rate, rf, and the factor risk premiums, RP1 and...