Suppose you invest $10,000 in Ford stock, and $30,000 in Tyco International Stock. You expect a return of 10% for Ford and 16% for Tyco. What is your portfolio’s expected return?
Q: Suppose you have $2,000 to invest. The market portfolio has an expected return of 10.5 percent and a…
A: Let the weight in Risk free Asset be A Therefore, weight in market portfolio be 1-A
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Q: You have been managing a $5 million portfolio that hasa beta of 1.15 and a required rate of return…
A: Risk-free rate: This can be described as the rate of return of the asset which has zero risks.…
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Q: Suppose you hold a portfolio consisting of a $10,000 investment in each of 8 different common…
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Q: You expect the risk-free rate (RFR) to be 3 percent and the market return to be 10 percent. You also…
A: Using CAPM
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Q: Assume the real return in the economy is 4 percent. It is anticipated that the consumer price index…
A: Real Return = 4% Consumer Price Index Start = 200 Consumer Price Index End = 210 Expected Inflation…
Q: expected return and volatility (
A: Expected return refers to the profit or loss that an investor should earn from an investment that…
Q: Your portfolio consists of 125 shares of CSH and 60 shares of EJH, which you just bought at $20 and…
A: CSH share= 125 shares @$20 each EJH share= 60 shares @31 per share Initial portfolio weights CSH…
Q: You have $21,600 to invest in a stock portfolio. Your choices are Stock X with an expected return of…
A: A portfolio consists of various securities belonging to the same sector or from varied sectors or a…
Q: Suppose you have $10,000 in cash and you decide to borrow another $10,000 at a(n) 6% interest rate…
A: Actual amount I have is $10,000 Borrowed amount is $10,000 Interest rate is 6%(on borrowed amount)…
Q: you again receive $1 dividend per share and then you sell all your shares at $14 per share. The…
A: Information Provided: Shares purchased at $11 = 2 Dividends = $1 per share Shares purchased at the…
Q: You currently have ¢100,000 invested in the shares of Barko Ltd that has an expected return of 15%…
A: Expected return is calculated by weighted average mean of return of stocks.Combined Standard…
Q: se you have $100,000 in cash, and you decide to borrow another $25,000 at a 6% interest rate to…
A: The expected return is the return of the portfolio which is the sum of each potential return that is…
Q: Ff you invest 30% of your funds in AT&T stock with an expected rate of return of 10% and the…
A:
Q: Suppose that you are working as a financial analyst in an investment bank. Your client is seeking…
A: Expected return on invested capital (EROIC) - EROIC is the return on the capital that is in place at…
Q: You have $24,000 to invest in a stock portfolio. Your choices are Stock X with an expected return of…
A: Given that the total investment amount is $24,000, expected return on stock X is 13% and expected…
Q: You have a portfolio consisting of 20 percent Boeing (beta = 1.3) and 40 percent Hewlett-Packard…
A: The beta of the portfolio is the sum of the product betas and the weights of the individual…
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A: Overall return (%) on portfolio can be calculated as: = Sum of return on both the stocks / Initial…
Q: Suppose you have $1 short $5000 worth of Kinston stock and invest the proceeds from your short sale,…
A: Solution:- Return of the portfolio means the return earned on the total money invested. So, return…
Q: You have a $2 million portfolio consisting of a $100,000 investment in eachof 20 different stocks.…
A: Given ,AMount in portfolio - $2 MillionNumber of stocks - 20Beta of portfolio is 1.1
Q: You expect the risk-free rate (RFR) to be 3 percent and the market return to be 10 percent. You also…
A: If Capital Asset Pricing Model hold good Required Return = Risk Free rate + (market Return - Risk…
Q: ave $375,000 in cash, and you decide to borrow another $63,750 at a 7% interest rate to invest in…
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Q: 1. What is the required rate of return on the initial P20M investment? 2. What is the rate of…
A: Formula used is as follows: Required rate of return = Rf + Beta * (Rm - Rf)
Q: Suppose you invest in 230 shares of Johnson and Johnson at $70 per share and 240 shares of Yahoo at…
A: To find: Rate of return of portfolio
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A: Portfolio refers to the collection of all individual securities or investments held by a person or…
Q: what is the new value of the portfolio, and what return did it earn? After the price change, what…
A: Expected return refers to the return earn by an investor on the amount invested during a period of…
Q: percent of stock X, 20 percent of stock Y, and the rest in stock Z. Stock X has an expected return…
A: Return on portfolio is weighted average return of all stocks in portfolio.
Q: Your Company's manager has a $40 million portfolio with a beta of 1.00. The risk-free rate is 4.25%,…
A:
Q: An investor has $5,000 invested in a stock which has an estimated beta of 1.2, and another $15,000…
A: Required return of portfolio = risk free rate + (beta of portfolio * market risk premium) 15% = 6% +…
Q: You have recently received $400,000 and you are considering investing $250,000 in the WIG and the…
A: The portfolio expected return refers to the weighted average return of the individual securities.…
Q: You have $100,000 to invest in a portfolio containing Stock X and Stock Y. Your goal is to create a…
A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only…
Q: Assume that you bought 200 stock B in your portfolio for total investment of $1200, now the market…
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Q: You have $260,000 to invest in a stock portfolio. Your choices are Stock H, with an expected return…
A: The expected return of a portfolio helps the investor to determine the performance of the portfolio.
Q: You expect HGH stock to have a 20% return next year and a 45% volatility. You have $25,000 to…
A: Volatility Volatility indicates the pricing behavior of the security is indicated by volatility.…
Q: Suppose you held a diversified portfolio consisting of a $7,500 investmentin each of 20 different…
A: given, number of stock = 20 probability of each stock = 1/20 price of each stock = $7500 value of…
Q: What will be the expected return and the beta of your portfolio after you purchase the new stock
A: Expected return is the return which is the return which has been expected by the investor to earn…
Q: Your portfolio consists of 100 shares of CSH and 50 shares of EJH, which you just bought at $20 and…
A: Given that: The portfolio consists of 100 shares of CSH and 50 shares of EHJ Purchase price $20and…
Q: Currently, the risk-free return is 3 percent, and the expected market rate of return is 9 percent.…
A: Given information: Risk free return is 3% Expected market rate of return is 9%
Q: You own a portfolio that has a total value of $215,000 and invested it is invested in Stock D with a…
A: Given: Total value of investment = $215,000 Stock D beta = 0.86 Stock E beta = 1.39
Q: A portfolio consists of $15,000 in Stock M and $22,900 invested in Stock N. The expected return on…
A: Amount invested in Stock M is $15000, expected return is 8.80% Amount invested in Stock N is $22,990…
Risk and return
Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.
Capital Asset Pricing Model
Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.
Suppose you invest $10,000 in Ford stock, and $30,000 in Tyco International Stock. You expect a return of 10% for Ford and 16% for Tyco. What is your portfolio’s expected return?
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- You have just invested in a portfolio of three stocks. The amount of money that you invested in each stock and its net are summarized below. Calculate the beta of the portfolio and use the capital asset pricing model (CAPM) to compute the expected rate of return for the portfolio. Assume that the expected rate of return on the market is 18% and that the risk-free rate is 6%. Stock A, Investment = $188,000, Beta=1.50, Stock B, Investment = $282,000, Beta =0.50, Stock C, Investment = $470,000, Beta = 1.30 Beta of the portfolio ? Expected rat of return ? %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 of 24% .Suppose Stock X has an expected return of 18% and beta of 1.4, and Stock Y has an expected return of 12% and beta of 0.8 %. 1. How much money will you invest in Stock Y? 2. What is the beta of your portfolio?You have just invested in a portfolio of three stocks. The amount of money that you invested in each stock and its beta are summarized below. Stock Investment Beta A $218,000 1.50 B 327,000 0.60 C 545,000 1.18 Calculate the beta of the portfolio and use the Capital Asset Pricing Model (CAPM) to compute the expected rate of return for the portfolio. Assume that the expected rate of return on the market is 17 percent and that the risk-free rate is 8 percent. (Round beta answer to 3 decimal places, e.g. 52.750 and expected rate of return answer to 2 decimal places, e.g. 52.75%.) Beta of the portfolio Expected rate of return %
- You have just invested in a portfolio of three stocks. The amount of money that you invested in each stock and its beta are summarized below. Stock Investment Beta A $222,000 1.41 B 333,000 0.53 C 555,000 1.30 Calculate the beta of the portfolio and use the Capital Asset Pricing Model (CAPM) to compute the expected rate of return for the portfolio. Assume that the expected rate of return on the market is 12 percent and that the risk-free rate is 7 percent. (Round beta answer to 3 decimal places, e.g. 52.750 and expected rate of return answer to 2 decimal places, e.g. 52.75%.) Beta of the portfolio enter the beta rounded to 3 decimal places Expected rate of return enter percentages rounded to 2 decimal places %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 of 13 percent. If Stock X has an expected return of 31 perCent and a beta of 1.80, and Stock Y has an expected return of 20 percent and a beta of 1.3 .how much money will you invest in Stocky? How do you interpret your answer? What is the beta of your portfolio?You have just invested in a portfolio of three stocks. The amount of money that you invested in each stock and its beta are summarized below. Stock. Investment A B C $224,000 336,000 560,000 Beta of the portfolio Beta Expected rate of return 1.50 0.60 Calculate the beta of the portfolio and use the Capital Asset Pricing Model (CAPM) to compute the expected rate of return for the portfolio. Assume that the expected rate of return on the market is 16 percent and that the risk-free rate is 8 percent. (Round beta answer to 3 decimal places, e.g. 52.750 and expected rate of return answer to 2 decimal places, e.g. 52.75%.) 1.35 do % SUPP
- You have just invested in a portfolio of three stocks. The amount of money that you invested in each stock and its beta are summarized below. Stock A B C Investment $198,000 297,000 495,000 Beta 1.45 0,60 Beta of the portfolio Expected rate of return 1.30 Calculate the beta of the portfolio and use the Capital Asset Pricing Model (CAPM) to compute the expected rate of return for the portfolio. Assume that the expected rate of return on the market is 14 percent and that the risk-free rate is 8 percent. (Round beta answer to 3 decimal places, e.g. 52.750 and expected rate of return answer to 2 decimal places, e.g. 52.75%.) %You own a portfolio that has $2,800 invested in Stock A and $3,900 invested in Stock B. Assume the expected returns on these stocks are 9 percent and 15 percent, respectively. What is the expected return on the portfolio? (You own a portfolio that has $1,800 invested in Stock A and $2,900 invested in Stock B. If the expected returns on these stocks are 9% and 15%, respectively, what is the expected return on the portfolio?
- Suppose you buy 500 shares of Ford at $11 per share and 100 shares of Citigroup stock at $28 per share. If Ford’s share price goes up to $13 and Citigroup’s rises to $40, what is the new value of the portfolio, and what return did it earn?. After the price change, what are the new portfolio weights?You have $19,878 to invest in a stock portfolio. Your choices are Stock "X" with an expected return of 12.5% and Stock Y with an expected return of 8.24%. If your goal is to create a portfolio with an expected return of 11.92%, how much money will you invest in Stock X? State of Economy Probability of State of Economy Return Stock A Return Stock B Return Stock C Boom 0.20 19.41% 20.65% 29.51% Good 0.35 8.08% 10.59% 13.88% Poor 0.40 5.53% 3.23% 5.04% Bust 0.05 1.77% 1.47% 1.16% Your portfolio is invested 23% each in stock A and C and the remaining in stock B. What is the expected return of the portfolio? NOTE: Enter the PERCENTAGE number rounding to two decimals. If your decimal answer is 0.034576, your answer must be 3.46. DO NOT USE the % sign A Stock has a beta of 1, the expected return on the market is 17.72%, and the risk-free rate is 4.85%. What must the expected return on this stock be? NOTE: Enter the PERCENTAGE number rounding to two…You currently own $100, 000 worth of Wal-Mart stock. Suppose that Wal-Mart has an expected return of 14% and a volatility of 23%. The market portfolio has an expected return of 12% and a volatility of 16%. The risk free rate is 5%. Required: Assuming the CAPM assumptions hold, what alternative investment has the highest possible expected return while having the same volatility as Wal-Mart? What is the expected return of this portfolio? ......(Do not provide solution in image and AI based).....