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Author Question: A friend brags that she expects to earn a return of 10.25 on her portfolio with a beta of 0.825. ... (Read 94 times)

jayhills49

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on: Jul 10, 2018
A friend brags that she expects to earn a return of 10.25 on her portfolio with a beta of 0.825.
 
  Can you match her performance with Stock X (12 return and a beta of 1.1 ) and the risk free asset that earns a 5 return? With what portfolio weights?
  A) Yes, 0.75 Stock X and 0.25 Risk Free Asset
  B) Yes, 0.25 Stock X and 0.75 Risk Free Asset
  C) Yes, 0.5 Stock X and 0.5 Risk Free Asset
  D) No

Question 2

Your uncle offers you a stream of payments whose present value, today, is 62,000. There are 15 equal annual payments in the stream. The first payment in the stream occurs seven years from today.
 
  If the interest rate is 14, then what is the value of each payment?
  A) 22,156.40
  B) 19,435.43
  C) 25,258.29
  D) 28,794.45
  E) 10,094.16


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amandalm

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Reply #1 on: Jul 10, 2018
Answer to Question 1

A

Answer to Question 2

A


jayhills49

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Reply #2 on: Jul 10, 2018
TY


amandalm

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Reply #3 on: Jul 10, 2018
Happy to Help


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