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company stock Multiple Choice: Problems Easy: . You hold a portfolio consisting of a $5,000 investment in each of 20 different stocks. The portfolio beta is equal to 1.12. You have decided to sell a coal mining stock (b = 1.00) at $5,000 net and use the proceeds to buy a like amount of a mineral rights company stock (b = 2.00). What is the new beta of the portfolio? a. 1.1139 b. 1.1700 c. 1.2311 d. 1.2927 e. 1.3573 ...

Other / Other 19 Mar 2016

Fama-French model . Which of the following statements is CORRECT? a. The typical R2 for a stock is about 0.94 and the typical R2 for a portfolio is about 0.6. b. The typical R2 for a stock is about 0.3 and the typical R2 for a large portfolio is about 0.94. c. The typical R2 for a stock is about 0.94 and the typical R2 for a portfolio is also about 0.94. d. The typical R2 for a stock is about 0.6 and the typical R2 for a portf ...

Other / Other 19 Mar 2016

returns on United Fund . Consider the information below for Postman Builders Inc. Suppose that the expected inflation rate and thus the inflation premium increase by 2.0 percentage points, and Postman acquires risky assets that increase its beta by the indicated percentage. What is the firm's new required rate of return? Beta: 1.50 Required return (rs) 10.20% RPM: 6.00% Percentage increase in beta: 20% a. 14.00% b. 14. ...

Other / Other 19 Mar 2016

return Find the value such that there is 1% chance that the return is less than that value. Math Assignment Help, Math Homework help, Math Study Help, Math Course Help ...

Other / Other 19 Mar 2016

probability What is the probability that the return will be larger than .2 Math Assignment Help, Math Homework help, Math Study Help, Math Course Help ...

Other / Other 19 Mar 2016

indifference curves . Stock A has an expected return rA = 10% and A = 10%. Stock B has rB = 14% and B = 15%. rAB = 0. The rate of return on riskless assets is 6%. a. Construct a graph that shows the feasible and efficient sets, giving consideration to the existence of the riskless asset. b. Explain what would happen to the CML if the two stocks had (a) a positive correlation coefficient or (b) a negative correlatio ...

Other / Other 19 Mar 2016

return on the fund What is the probability that the return on the fund is between 0 and 0.2 Math Assignment Help, Math Homework help, Math Study Help, Math Course Help ...

Other / Other 19 Mar 2016

standard deviation . Security A has an expected return of 12.4% with a standard deviation of 15%, and a correlation with the market of 0.85. Security B has an expected return of -0.73% with a standard deviation of 20%, and a correlation with the market of -0.67. The standard deviation of rM is 12%. a. To someone who acts in accordance with the CAPM, which security is more risky, A or B? Why? (Hint: No calculations are neces ...

Other / Other 19 Mar 2016

hypothetical indifference curves . You plan to invest in Stock X, Stock Y, or some combination of the two. The expected return for X is 10% and X = 5%. The expected return for Y is 12% and Y = 6%. The correlation coefficient, rXY, is 0.75. a. Calculate rp and p for 100%, 75%, 50%, 25%, and 0% in Stock X. b. Use the values you calculated for rp and p to graph the attainable set of portfolios. Which part o ...

Other / Other 19 Mar 2016

fund is negative What is the probability that the return on the fund is negative. Math Assignment Help, Math Homework help, Math Study Help, Math Course Help ...

Other / Other 19 Mar 2016