You own a portfolio that has $42,000 invested in Stock A and $11,500 invested in Stock B. If the expected returns on these stocks are 18% and 6%, respectively, what come closest to the expected return on the portfolio? 12%

You own a portfolio that has $42,000 invested in Stock A and $11,500 invested in Stock B. If the expected returns on these stocks are 18% and 6%, respectively, what come closest to the expected return on the portfolio? 12%

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter2: Risk And Return: Part I

Section: Chapter Questions

Problem 4P: An analyst has modeled the stock of a company using the Fama-French three-factor model. The market...

See similar textbooks

Related questions

Q: A stock with a required rate of return of 10 percent sells for P35 per share. The stock’s dividend…

A: The Dividend Growth Model refers to a model that helps in calculating the intrinsic value of a stock…

Q: Twelve years ago, you deposited RM3,400 into an account. Seven years ago, you added an additional…

A: FV = PV* (1 + r / n)nt Where, PV = Present value FV = Future value r = Rate of interest (percentage…

Q: House 6 years 2 What is the On the ان price . 4) $8286,24 $2125 24th 15% intrest (compounded mont…

A: Loans are paid by monthly payments these carry the payment for interest and payment for principal…

Q: It is December 2022. You work as a financial analyst for Merck & Co. and are tasked with the due…

A: Given: Particulars Expected free cash flows 2023 Cash flows $65.50 2024 Cash flows $98.25…

Q: 32 Which of the following is NOT regulated by Securities Commission (SC)? Select one: Bond…

A: The securities commission will be the regulating commission of equity market and bond market in the…

Q: Two currently owned machines are being considered for the production of a part. The capital…

A: Machine A Amount in P Production rate (Parts/hr) 100.00 Hours…

Q: In your position as research assistant to a portfolio manager, you need to analyze the profitability…

A: Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

Q: Assigning a Long-Term Debt Rating Using Financial Ratios Refer to the information below from…

A: Revenue $13,601 Interest expense, gross $181 Depreciation expense 306 Dividends, including…

Q: Intro Amazon has a beta of 0.8. The risk-free rate is 2.9% and the expected return on the S&P500 is…

A: Cost of Equity is also known as KE means cost which was born by the company for equity finance. It…

Q: Filer Manufacturing has 6,382,006 shares of common stock outstanding. The current share price is…

A: Equity is the amount that would remain in the hands of a company's shareholders after all of its…

Q: Impact of ICT In Finance and Management of Banks

A: ICT refers to information and communications technology. In the realm of banking ICT plays a very…

Q: The credit analyst for Mazibuko Limited has established the following data relating to the working…

A: Cash conversion cycle represent the number of days taken by the company to convert its goods into…

Q: In the following table you are given for a company the earnings per share and the dividend per share…

A: Growth rate after 2023 is 8% Required return is 11% To Find: Value of Stock in 2023

Q: A property is purchased at 1M and is expected to last 10 years with a salvage value of P100,000.…

A: Initial Cost = P 1,000,000 Salvage value = P100,000. Time Period = 10 Years

Q: Pearl white berhad is considering Project with following cost and rate of return: Cost (RM) 3,000…

A: Since you have posted a question with multiple sub-parts, we will solve the first three subparts for…

Q: Which of the following can be classified under Business Finance? Select one: a. Australian…

A: Business finance Business finance deals with raising and managing capital funds of the…

Q: LX is considering an project that requires a $3,560,000 initial investment, and is expected to…

A: NPV is technique under Capital Budgeting which help in decision making on the basis of future Cash…

Q: A firm evaluates all of its projects by applying the IRR rule. a. What is the project's IRR? (Do…

A: Required return is 15% To Find: IRR of the project Acceptance of project

Q: MAKE AN INTERPRETATION AND ANALYSIS FOR THIS TABLE BELOW. I WILL UPVOTE. THANK YOU Receivables…

A: Accounts receivable turnover ratio measures the average number of times that receivables from sales…

Q: A. Use the high-low method to estimate: • The variable costs per unit produced 1-- . The total fixed…

A: High- Low Method Variable Cost per unit = (Highest Activity Cost - Lowest Activity Cost)/(Highest…

Q: A company is in need of a small vehicle to make deliveries. It is intending to choose between 2…

A: The present worth analysis is a method of finding the best alternative by finding out their…

Q: 0 Ijma’ is the source of shari’ah law that concerns Select one: all the actions and sayings…

A: In the Islam the banking and finance is done in very different manner and have own different rules…

Q: Use graphical approximation techniques to answer the question. When would an ordinary annuity…

A: An annuity is a type of contract usually used in the insurance industry. It provides a periodic…

Q: As companies evolve, certain factors can drive sudden growth. This may lead to a period of…

A: Given: Risk free rate 4.00% Market risk premium 4.80% Beta 2.000

Q: Describe the disadvantages of different methods of short-term debt financing.

A: Short term debt financing are also referred to as current liabilities.These are the financial…

Q: Description 4. Using the data for Clorox Company (NYSE: CLX), presented below: Fiscal Year Sales…

A: Annual growth rate It is calculated as shown below. Annual growth rate=Current year valuePreviuos…

Q: 21) If you want to earn an annualized discount rate of 5%, what is the most you can pay for a 95-…

A: PV = FV / (1 + r / n)nt Where, PV = Present value FV = Future value r = Rate of interest…

Q: e first option is $ Part 2 (Re

A: Net price refers to the difference between the closing price of the trading period and the current…

Q: The following annual date pertains to Badidap corp. Financial breakeven point 519000 Preferred…

A: The amount of revenue before taxes, interest, and amortization that will yield either negative net…

Q: National Business Machine Company (NBM) has $4.2 million of extra cash after taxes have been paid.…

A: Here, After-tax cash flows = 4,200,000 Time period of dividend = 3 years Treasury Bill yield = 2%…

Q: A project requires a $2 million investment in net working capital (NWC) today, and will be fully…

A: Initial Investment = $ 2 million PV = C * 1-1+i-ni C = PV1-1+i-1i PV = 2 million i = 0.12 n = 5…

Q: Considering an interest rate i=14% per year, what is the compound interest rate equivalent to the…

A: Interest rate is 14% per year To Find: Equivalent compounded interest rate for 45 days Equivalent…

Q: 1. The total market value of the equity of Living Inc. is $6 million, and the total value of its…

A: Weighted average cost of capital WACC gives the firms combined cost of capital, including the…

Q: BIC Co. is residing in Spain and exports bottles of wine in its Mexican Market for 225 Mexican Peso…

A: Profit of BIC Co. in Euro for June 10, 2022 Total Sales = 3,000 bottles Total sale value = 3000 *…

Q: What are the short term and long term financing available for companies to generate funds for…

A: Financing is the acquisition of funds from various sources for smooth running of business. The firms…

Q: Net present value

A: Net present value refers to the balance of present value of cash flows compared with its initial…

Q: For the company in the previous problem, what is the dividend yield? What is the expected capital…

A: Solution:- Required rate of return means the rate of return demanded by an investor while investing…

Q: The Michner Corporation is trying to choose between the following two mutually exclusive design…

A: To Find: Profitability Index Net present Value

Q: Your clothing business, FashionV Co has fixed costs of $1,000 per year, depreciation charges of $500…

A: The degree of operating leverage is used to find out the impact of change in sales on the earnings…

Q: Hotel California, a lovely place along the 101 Highway, last underwent an upgrade in 1969. As a…

A: Expected Profit The expected profit (read, average profit in this case) can be computed as the sum…

Q: What is meant by Capital Structure of a company? In this context, describe the various sources of…

A: The capital structure of a company describes the amount of debt and/or equity used to finance both…

Q: 2. 4. Briefly explain the following Time value of money L IL n 0 1 Doarp Difference between simple…

A: Simple Interest is the method in which we calculate the interest on a specific principal amount at a…

Q: d Standards of treatmen forcip

A: Direct investor refers to the investment which is designed for acquiring the controlling interest…

Q: Mr. Kevin Dates is the owner of an expanding business operating in bakery industry located in…

A: NPV is techniques under Capital budgeting which help in decision making on the basis of positive…

Q: You are considering whether to pursue a higher degree after you finish your college study. The…

A: The Tuition fees for 2 years is 10,000 which is assumed to be paid in day 1. Monthly income will be…

Q: ssume that Ball has 323mm shares outstanding. Ball plans to spend $258mm on dividends and $300mm on…

A: Value of stock can be found from constant growth of dividend model from the given dividend and…

Q: Brutus Inc estimates that the relevant incremental after-tax cash flows associated with a project…

A: As the name suggest, payback period is the time within which we will be able to recover our initial…

Q: Filer Manufacturing has 9,839,969 shares of common stock outstanding. The current share price is…

A: Market value Market value is the word used to define the total value of an asset or a company's…

Q: onomics Corus Berhad is interested to invest in bonds. Currently, the financial manager is…

A: Price of bond is the present value of coupon payment and present value of the face value of bond on…

Q: Three Smiles, Inc. wants to ensure that its charity dental practice can go on forever. They…

A: Solution:- When an amount grows by an equal rate forever, it is known as constant growth rate…

Question

You own a portfolio that has $42,000 invested in Stock A and $11,500 invested in Stock B. If the expected returns on these stocks are 18% and 6%, respectively, what comes
closest to the expected return on the portfolio?
12%
15.4%
14.5%
12.2%
16.8%

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Calculations are as follow:

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 3 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

An analyst has modeled the stock of a company using the Fama-French three-factor model. The market return is 10%, the return on the SMB portfolio (rSMB) is 3.2%, and the return on the HML portfolio (rHML) is 4.8%. If ai = 0, bi = 1.2, ci = 20.4, and di = 1.3, what is the stock’s predicted return?
You own a portfolio that has $2,500 Invested in Stock A and $3,850 Invested in Stock B. If the expected returns on these stocks are 9 percent and 15 percent, respectively, what Is the expected return on the portfolio? Multiple Choice O 12.64% O 12.89% O 13.27% O 11.36% 12.00%
You own a portfolio that is 22 percent invested in Stock X, 37 percent in Stock Y, and 41 percent in Stock Z. The expected returns on these three stocks are 12 percent, 15 percent, and 17 percent, respectively. What is the expected return on the portfolio? Expected return _________%
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?
You own a portfolio that has $16,000 invested in Stock A and $17,000 invested in Stock B. The expected returns on these stocks are 14.9 percent and 9.7 percent, respectively. What is the expected return on the portfolio?
You own a portfolio that has $3,00o0 invested in Stock A and $4,100 invested in Stock B. Assume the expected returns on these stocks are 10 percent and 16 percent, respectively. What is the expected return on the portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Expected return %
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?
You own a portfolio that is invested 32% in share A, 43% in share B and the remainder in share C. The expected returns on shares A, B and C are 11.5%, 15.2% and 8.8%, respectively. What is the expected return on the portfolio? a. 11.71% b. 12.18% c. 12.83% d. 12.42% e. 12.49%
An investor wants to earn 18% return by investing in a portfolio that contains Stock 1, Stock 2, and Stock 3. Expected return of Stock 1 is 19% and expected return of Stock 2 is 9%. What are weights of Stock 1 and Stock 2 to meet the required return? a. 10% and 90% respectively b. 90% and 10% respectively c. 0% and 100% respectively d. 95% and 200% respectively
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?
Examples Given You own a portfolio of two stocks, A and B. Stock A is valued at $10,500 and has an expected return of 11 percent. Stock B has an expected return of 9 percent. What is the expected return on the portfolio if the portfolio value is $15,500?