An investor is forming a portfolio by investing $50,000 in stock A that has a beta of 1.50, and $25,000 in stock B that has a beta of 0.90. The return on the market is equal to 6%, and Treasury bonds have a yield of 4%. What is the required rate of return on the investor's portfolio? 5.8% 6.8% 6.6% 7.5% 7.0%
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- An investor is forming a portfolio by investing P25,000 in stock A that has a beta of 1.50, and P25,000 in stock B that has a beta of 0.80. The return on the market is equal to 6 percent and Treasury bonds have a yield of 4 percent. What is the required rate of return on the investor's portfolio? a. 6.3% b. 6.8% С. 7.8% d. 8.0%An investor is forming a portfolio by investing $8,000 in stock A which has a beta of 0.80, and $8,000 in stock B which has a beta of 2.20. The return on the market is equal to 8% and treasure bonds have a yield of 3% (rRF). What’s the portfolio beta? 0.80 1.50 1.90 2.20An investor is forming a portfolio by investing $50,000 in stock A which has a beta of 2.40, and $50,000 in stock B which has a beta of 0.60. The return on the market is equal to 8% and treasure bonds have a yield of 3% (rRF). What’s the portfolio beta? 0.60 1.30 1.50 1.80 Using the information in Question 41, calculate the required rate of return on the investor’s portfolio 11.0% 15.0% 12.0% 10.5% A retail store is offering a diamond ring for sale for 36 months at $128 per month. The retail price of the ring is $4,000. What is the interest rate on this offer? 9.43% 11.20% 11.98% 12.11%
- Use the information to answer the following questions. An investor is forming a portfolio by investing $50,000 in stock A that has a beta of 1.50, and $25,000 in stock B that has a beta of 0.90. The return on the market is equal to 6% and Treasury bonds have a yield of 4%. What is the weight on stock A? Select one: a. 0.25 b. 0.9 c. 0.6667 d. 0.5 e. 0.3333Suppose you form a portfolio consisting of $31,000 invested in a mutual fund with beta of 1.6, $18,000 invested in Treasury securities $19,000 invested in an index fund with the same beta as the entire market. Expected market risk premium is 6.3%. Risk-free rate is 0.8% What is the exped return of this portfolio according to the CAPM? O a. 6.9% Ob. 6.6% O c. 7.2% d. 9.1% e. 5.8%An investor plans to invest funds in the following stocks: Stock Beta Amount Invested A 1.39 $1,939.00 B 1.21 $2,818.00 C 0.75 $1,378.00 The risk-free rate is currently 3.00%, while the market risk premium is 6.00%. What is the beta of this portfolio?
- 1. What is your expected portfolio return of an investment portfolio with a 70/30 allocation of stocks and bonds if you expect long term equities to return 10%, and long term bonds to return 6%? 8.1% 8.4% 9.1% 8.8% 2. What is your expected portfolio return of an investment portfolio with a 30/70 allocation of stocks and bonds if you expect long term equities to return 6%, and long term bonds to return 3%? 5.1% 3.9% 4.2% 3.5%How do I calculate the Portfolio Expected Return: You own a portfolio that has $4,600 invested in Stock X and $5,200 invested in Stock Z. What is the expected return on the portfolio if the expected returns on these stocks are 9.75 percent and 16.50 percent?You are holding a portfolio with the following investments and betas: Stock Dollar investment Beta A $250,000 1.30 B 200,000 1.70 C 400,000 0.75 D 150,000 -0.30 Total investment $1,000,000 The market's required return is 11% and the risk-free rate is 4%. What is the portfolio's required return? Do not round intermediate calculations. Round your answer to three decimal places.
- If you have an investment portfolio which is a mix of stock and bonds, with the stocks having a return of 1.2% and the bonds having a return of 3.5% then what is the expected return of the portfolio if it contains 30% stocks.3. Suppose that for some reason you are required to invest in 50% of your portfolio in bonds and 50% in stocks. If the covariance of your portfolio is 15%. a. What must be your correlation coefficient between stocks and bond returns? And SD of stocks and bonds are 25 and 12 respectively. b. What is the expected return of your portfolio if expected return on bonds and stocks are 6% and 10% respectively? c. Suppose that the correlation between stocks and bond returns is 0.22 but you are free to choose which ever portfolio proportions you desire, are you likely to be better or worse off than you were in part (a)?Portfolio Expected Return. You own a portfolio that has $2,750 invested in Stock A and $3,900 invested in Stock B. If the expected returns on these stocks are 9 percent and 14 percent, respectively, what is the expected return on the portfolio?