HomeworkLib
Question

What must be the beta of a portfolio with Elip) = 17.4%, if re= 3% and Elrm = 15%? (Do not round intermediate calculations. R

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Expected return = Risk free rate + beta (market return - risk free rate)

0.174 = 0.03 + Beta(0.15 - 0.03)

0.174 = 0.03 + Beta(0.12)

0.144 = Beta(0.12)

Beta = 1.20

0 0
Add a comment
Know the answer?
Add Answer to:
What must be the beta of a portfolio with Elip) = 17.4%, if re= 3% and...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • 1 What must be the beta of a portfolio with Elrp) = 17%, if ! €=...

    1 What must be the beta of a portfolio with Elrp) = 17%, if ! €= 5% and Elry) = 15%? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Beta of a portfolio

  • What must be the beta of a portfolio with Erp) - 13.75%, if re. 6% and En) - 113? (Round your answer to 2 decimal p...

    What must be the beta of a portfolio with Erp) - 13.75%, if re. 6% and En) - 113? (Round your answer to 2 decimal places.) Beta of portfolio

  • You have a portfolio with a beta of 1.08. What will be the new portfolio if...

    You have a portfolio with a beta of 1.08. What will be the new portfolio if you keep 88 percent of your money in the old portfolio and 12 percent in a stock with a beta of 0.51? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

  • You have a portfolio with a beta of 1.20. What will be the new portfolio beta...

    You have a portfolio with a beta of 1.20. What will be the new portfolio beta if you keep 87 percent of y money in the old portfolio and 13 percent in a stock with a beta of 0.66? (Do not round intermedia calculations. Round your final answer to 2 decimal places.) New portfolio beta

  • Part A) You have been managing a $5 million portfolio that has a beta of 1.25...

    Part A) You have been managing a $5 million portfolio that has a beta of 1.25 and a required rate of return of 8.875%. The current risk-free rate is 2%. Assume that you receive another $500,000. If you invest the money in a stock with a beta of 1.45, what will be the required return on your $5.5 million portfolio? Do not round intermediate calculations. Round your answer to two decimal places. Part B) Carnes Cosmetics Co.'s stock price is...

  • Suppose that a portfolio consists of the following stocks: Stock Amount Beta Chevron $20,000 0.55 General...

    Suppose that a portfolio consists of the following stocks: Stock Amount Beta Chevron $20,000 0.55 General Electric 55,000 1.40 Whirlpool 25,000 1.20 The risk-free rate ( ) is 6 percent and the market risk premium ( ) is 8.4 percent. Determine the beta for the portfolio. Round your answer to two decimal places. Determine how much General Electric stock one must sell and reinvest in Chevron stock in order to reduce the beta of the portfolio to 1.00. Do not...

  • A stock has a beta of 1.12 and an expected return of 10.8 percent. A risk-free...

    A stock has a beta of 1.12 and an expected return of 10.8 percent. A risk-free asset currently earns 2.7 percent. a. What is the expected return on a portfolio that is equally invested in the two assets? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. If a portfolio of the two assets has a beta of .92, what are the portfolio weights? (Do not round intermediate calculations...

  • You own a stock portfolio invested 35 percent in Stock Q, 25 percent in Stock R,...

    You own a stock portfolio invested 35 percent in Stock Q, 25 percent in Stock R, 25 percent in Stock S, and 15 percent in Stock T. The betas for these four stocks are .83, 1.21, 1.22, and 1.39, respectively. What is the portfolio beta? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Portfolio beta A stock has an expected return of 12.4 percent, the risk-free rate is 4.5 percent, and the market...

  • The standard deviation of the market-index portfolio is 30%. Stock A has a beta of 1.50 and a res...

    The standard deviation of the market-index portfolio is 30%. Stock A has a beta of 1.50 and a residual standard deviation of 40%. a-1. Calculate the total variance for an increase of 0.10 in its beta? (Do not round intermediate calculations. Round your answer to 4 decimal places.) Total variance 0.3904 a-2 Calculate the total variance for an increase of 3.35% in its residual standard deviation? (Do not round intermediate calculations. Round your answer to 4 decimal places.) Total variance...

  • Subject: PORTFOLIO BETA A mutual fund manager has a $20 million portfolio with a beta of...

    Subject: PORTFOLIO BETA A mutual fund manager has a $20 million portfolio with a beta of 0.75. The risk-free rate is 4.00%, and the market risk premium is 5.0%. The manager expects to receive an additional $5 million, which she plans to invest in a number of stocks. After investing the additional funds, she wants the fund's required return to be 19%. What should be the average beta of the new stocks added to the portfolio? Do not round intermediate...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT