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What is the beta of Stock I and II respectively?

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4. (TCO 8) Assume a project that has the following returns for years 1 to 5: 15%, 4%, -13%, 34%, and 1 answer below » 4. (TCO 8) Assume a project that has the following returns for years 1 to 5: 15%, 4%, -13%, 34%, and 17%. What is the approximate expected return of this investment? 11% 17% 16.60% 10% 5. (TCO 8) Assume you are considering investing in two stocks, A & B. Stock A has an expected return of 16% and Stock B has an expected return of 9.5%. Your goal is to create a two-security portfolio that will have an expected return of 12%. If you have $250,000 to invest today, approximately how much would you invest in Stock A? (Hint: Use the formula for avarage rate and solve for the unknown. Remember View complete question » 4. (TCO 8) Assume a project that has the following returns for years 1 to 5: 15%, 4%, -13%, 34%, and 17%. What is the approximate expected return of this investment? 11% 17% 16.60% 10% 5. (TCO 8) Assume you are considering investing in two stocks, A & B. Stock A has an expected return of 16% and Stock B has an expected return of 9.5%. Your goal is to create a two-security portfolio that will have an expected return of 12%. If you have $250,000 to invest today, approximately how much would you invest in Stock A? (Hint: Use the formula for avarage rate and solve for the unknown. Remember that the two investments together must equal 100%.) $96,000 $150,000 $75,000 More than $200,000 6. (TCO 8) For this exercise, use the information provided for Problem 30 of Chapter 11 (page 375 of your textbook). Assume that the probability of the state of the economy has changed as follows: The probability of a recession has increased to 30% and the probability for a normal state of economy is now 40%. The market risk premium has increased by 1% as well. What is the beta of Stock I and II respectively? 0.6 and 1.2 1.2 and 0.6 1.2 and 0.4 Cannot be determined with the information given Attachments: Q.-Attachment….docx View less » Sep 16 2015 05:15 PM


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