The beta of portfolio is weighted average of betas of investment in portfolio
Portfolio beta = ( Stock A * beta ) + ( Stock B * beta ) + ( stock C * beta ) + ( stock D * beta ) / Total investment value
= ( 150000 * 1.4 ) + (50000 * 0.8 ) + ( 100000 * 1) + ( 75000 * 1.2) / 375000
=210000 + 40000 + 100000 + 90000 / 375000
= 440000 / 375000
=1.17
COVESE 8-You hold the following portfolio: Stock Investment Beta $150,000 1.40 B 50,000 0.80 C 100.000...
Paul McLaren holds the following portfolio: Stock Investment Beta A $150,000 1.40 B 50,000 0.80 C 100,000 1.00 D 75,000 1.20 Total $375,000 Paul plans to sell Stock A and replace it with Stock E, which has a beta of 0.75. By how much will the portfolio beta change? a. −0.260 b. −0.286 c. −0.190 d. −0.211 e. −0.234
You hold the following portfolio: Stock Investment Beta $150.000 1.40 $50,000 0.80 $100,000 1.00 1.20 $75,000 $375,000 Total You plan to sell Stock A and replace it with Stock E, which has a beta of 0.80. By how much will the portfolio beta change? Do not round your intermediate calculations. a.-0.194 b. -0.271 OC -0.240 d. -0.290 e-0.230
Tom Noel holds the following portfolio: Stock Investment Beta $150,000 1.40 $50,000 0.80 $100,000 1.00 $75,000 1.20 Total $375,000 Tom plans to sell Stock A and replace it with Stock E, which has a beta of 0.83. By how much will the portfolio beta change? Do not round your intermediate calculations.
e, payu semiannually. The bonds matu Jul alate Value of $1,000, and a yield-to-maturity of 8.5%. What is the price of the bond 12. The risk-free rate is 5% and the market risk premium is 7%. What is the required risk return of a stod with a beta of 2.0? 13. You pay $1,000 for an investment that returns $1,100 in one year. What is your annual rate of ret 14. Gilligan's bonds currently sell for $1,150. Interest is paid...
Tom O'Brien has a 2-stock portfolio with a total value of $100,000 $47.500 is invested in Stock A with a beta of 0.75 and the remainder is invested in Stock B with a beta of 1.42. What is his portfolio's beta? Do not round your intermediate calculations. Round your final answer to 2 decimal places. a. 1.06 O b. 1.05 . c. 1.09 • O d. 1.10 OOO oooo.. o. Click here to read the eBook: The Relationship Between Risk...
A suppose you have a three-security portfolio containing bonds A, B and C. The modified duration of the portfolio is 6.5. The market values of bonds A, B and Care $30, $15 and $40, respectively. The modified durations of bonds A and Bare 3.5 and 5.5, respectively. Which of the following amounts is closer to the modified duration of bond C7 A) 9.1. B) 4.6. C) 7.2. D) 7.5. 7. Given the 1-year annualized spot rate of 8.3 percent, and...
Morin Company's bonds mature in 8 years, have a par value of $1,000, and make an annual coupon interest payment of $65. The market requires an interest rate of 6.7% on these bonds. What is the bond's price? $987.92 $1,215.14 $770.58 $1,155.86
1. Romer Inc. recently issued bonds that mature in 10 years. They have a par value of $1,000 and an annual coupon of 5.5%. If the current market interest rate is 7.0%, at what price should the bonds sell?
please show how to compute with a financial calculator. thank you! Bond Valuation Exercises: OM Question 1. GTF Corporation has 5 percent coupon bonds on the market with a par of $1,000 and 10 years left to maturity. The bonds make annual interest payments. If the market interest rate on these bonds is 7 percent, what is the current bond price? Question 2. MTV Corporation has 7 percent coupon bonds on the market with a par of $1,000 and 8...
Only second. Not 1 Problem 2 (27 points) Suppose you hold a 6.80 percent coupon bond with a par value of $1,000, that matures in 30 years and pays semi-annual coupons. 1) If currently, the bond is priced to offer a yield to maturity of 7.00 percent, what is its current selling price? (8 points) Problem 3 (15 points) O'Brien Lid's outstanding bonds have a $1.000 par value and they mature in 25 years. The nominal yield to maturity is...