Author Question: J.R. has a three stock portfolio. Details of the portfolio are provided in the table. If the T-bill ... (Read 74 times)

khang

  • Hero Member
  • *****
  • Posts: 569
J.R. has a three stock portfolio. Details of the portfolio are provided in the table. If the T-bill rate is 5 and the market risk premium is 5.5. According to the CAPM, what is the expected return of J.R.
 
  's portfolio?
 
  Stock Investment Beta
  Motherlode Mines 30,000 1.6
  Lewd Lemons 40,000 1.0
  Bonanza Beef 30,000 0.8
 
  A) 5.50
  B) 6.16
  C) 10.00
  D) 10.50
  E) 11.16

Question 2

If you were required to estimate the average return for one category of securities for the coming year, history tells us that you should have the greatest degree of confidence estimating which of the following?
 
  A) Long-term government bonds
  B) 3-month U.S. Treasury bills
  C) Small-company stocks
  D) Large-company stocks



TheNamesImani

  • Sr. Member
  • ****
  • Posts: 334
Answer to Question 1

E

Answer to Question 2

Answer: B



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question


 

Did you know?

Most strokes are caused when blood clots move to a blood vessel in the brain and block blood flow to that area. Thrombolytic therapy can be used to dissolve the clot quickly. If given within 3 hours of the first stroke symptoms, this therapy can help limit stroke damage and disability.

Did you know?

A good example of polar molecules can be understood when trying to make a cake. If water and oil are required, they will not mix together. If you put them into a measuring cup, the oil will rise to the top while the water remains on the bottom.

Did you know?

Illness; diuretics; laxative abuse; hot weather; exercise; sweating; caffeine; alcoholic beverages; starvation diets; inadequate carbohydrate consumption; and diets high in protein, salt, or fiber can cause people to become dehydrated.

Did you know?

There are 20 feet of blood vessels in each square inch of human skin.

Did you know?

People with high total cholesterol have about two times the risk for heart disease as people with ideal levels.

For a complete list of videos, visit our video library