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Assume you are the money manager of a 4 million dollar investment fund. The fund consists of four stocks with the following investments & betas:
The portfolio is invested 30% each in A and C, & 40% in B. calculate the expected return of the portfolio? Find the variance of this portfolio and standard deviation?
Given your risk tolerance & your need to diversify, describe how the Selected Realized Returns & the Effects of Portfolio Risk for Average Stocks
Suppose you have two short term risk free investment choices. 1st is a one year zero coupon Treasury bill, which you can buy today at $950 for each 1000 dollar at maturity.
Emery Inc. has a beta equal to 1.5 & a required return of 14 percent based on the CAPM. If the market risk premium is 8%.
White Company stock has a beta of 1.5 & a required return of 15 percent, while Black Company stock has a beta of 1.0 & a required return of 12 percent.
Suppose that the risk-free rate is 6% and the expected return on the market is 13%. Calculate the required rate of return on a stock with a beta of 0.7?
Compute the stock's expected return, standard deviation, & coefficient of variation.
You have been provided with the financial statements for Francy Closet for the last three years. Francy is concerned that her net income has been decreasing, and she has employed you to provide a thor
The ten year bonds of Gator Corporation are yielding 8% per year. Treasury bonds with the same maturity are yielding 6.4% per year. The real risk-free rate (k*) has not changed
You have been scouring The Wall Street Journal looking for stocks that are "good values" & have computed the expected returns for five stocks (a,b,c,d,e). Suppose the risk-free rate (kRF) is 7% an
You have been provided with the financial statements for Francy Closet for the last three years. Francy is concerned that her net income has been decreasing,
Calculate the coefficient of variation on the company's stock? Suppose that the standard deviation is calculated using the population statistic.
The expected value of inflation for this next year (Year 1) is 3.25%. Determine the market anticipate will be the rate of inflation 3 years from now?
The real risk-free rate of interest is 3%. The market expects that inflation will be 3% every year for the next five years, & then will average 5% a year thereafter.
Drongo Corporation’s four year bonds currently yield 7.4%. The real risk-free rate of interest, k*, is 2.7% & is supposed to be constant. The maturity risk premium [MRP] is estimated to be 0
Suppose that a highly liquid market does not exist for long term T-bonds, & the expected rate of inflation is a constant. Given these situations, the nominal risk-free rate for T-bills is
Mr. Monty Terry, a real estate investor, is trying to decide between to potential small shopping center purchases. Calculate the expected value of the cash flow and the coefficient of variat
Suppose that your raises will just match the inflation rate [you estimate that inflation will average 3 percent a year for the next 25 year], what will you yearly salary be just before you retire an 2
She has employed you to provide a thorough analysis that will explain what is causing this drop in net income. You are also requested to make suggestion for the future.
You have been provided with the financial statements for Francy Closet for the last three years. Francy is concerned that her net income has been decreasing.
Describe whether the following statements are true or false. Derivative transactions are designed to increase risk and are used almost exclusively.
The Timberline firm expects a total need of $12,500 over the next three months. They have a beginning cash balance of 1,500 dollar, and cash is replenished when it hits zero.