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company stock



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 . Your mother’s holds well-diversified portfolio has an expected return of 12.0% and a beta of 1.20. She is in the process of buying 100 shares of Safety Corp. at $10 a share and adding it to her portfolio. Safety has an expected return of 15.0% and a beta of 2.00. The total value of your current portfolio is $9,000. What will the expected return and beta on the portfolio be after the purchase of the Safety stock? rp bp a. 11.69%; 1.22 b. 12.30%; 1.28 c. 12.92%; 1.34 d. 13.56%; 1.41 e. 14.24%; 1.48 . Suppose that (1) investors expect a 4.0% rate of inflation in the future, (2) the real risk-free rate is 3.0%, (3) the market risk premium is 5.0%, (4) Talcott Inc.’s beta is 1.00, and (5) its realized rate of return has averaged 15.0% over the last 5 years. Calculate the required rate of return for Talcot Inc. a. 10.29% b. 10.83% c. 11.40% d. 12.00% e. 12.60% Medium: . A stock you are holding has a beta of 2.0 and the stock is currently in equilibrium. The required rate of return on the stock is 15% versus a required return on an average stock of 10%. Now the required return on an average stock increases by 30.0% (not percentage points). The risk-free rate is unchanged. By what percentage (not percentage points) would the required return on your stock increase as a result of this event? a. 36.10% b. 38.00% c. 40.00% d. 42.00% e. 44.10% . Calculate the required rate of return for the Wagner Assets Management Group, which holds 4 stocks. The market’s required rate of return is 15.0%, the risk-free rate is 7.0%, and the Fund’s assets are as follows: Stock Investment Beta A $ 200,000 1.50 B 300,000 -0.50 C 500,000 1.25 D 1,000,000 0.75 a. 10.67% b. 11.23% c. 11.82% d. 12.45% e. 13.10% Business Management Assignment Help, Business Management Homework help, Business Management Study Help, Business Management Course Help


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