You won in a lottery $500 000 and are considering to invest the amount in any one of the following: a fund that mimics the ASX200 index, purchasing shares in AGL Energy Ltd, orshares in CSL Ltd. In order to make the decision you are required to use the following information:Stock/IndexBetaAGL Energy Ltd1.45CSL Ltd0,65ASX200 Index1.00The expected return on the market portfolio is 1196 and the risk- free rate is 5%.Perform the necessary calculations in order to determine which asset to invest in to obtain the highest return.E(Ri) = Rf. + Beta x (Rm - Rf)For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac).10ptE v. Av e I & O QArialBIU sParagraphClase Window.Save All AnswersSave and Submit to saye and submit. Click Save All Answers to save all answers.DELL27°C AQI 66 A Ge D g0 12 P7/202pe here to search

Risk Free Rate = 5% Expected Return on Market portfolio = 11% Beta: AGL Energy Ltd = 1.45 CSL Ltd =…

You won in a lottery $500 000 and are considering to invest the amount in any one of the following: a fund that mimics the ASX200 index, purchasing shares in AGL Energy Ltd, or shares in CSL Ltd. In order to make the decision you are required to use the following information: Stock/Index Beta AGL Energy Ltd 1.45 CSL Ltd 0.65 ASX200 Index 1.00 The expected return on the market portfolio is 119% and the risk- free rate is 5%. Perform the necessary calculations in order to determine which asset to invest in to obtain the highest return. E(Ri) = Rf.+ Beta x (Rm – Rf) For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac), 10pt E vE A I * Ō 8 Q ... BIUS Paragraph Arial

You won in a lottery $500 000 and are considering to invest the amount in any one of the following: a fund that mimics the ASX200 index, purchasing shares in AGL Energy Ltd, or shares in CSL Ltd. In order to make the decision you are required to use the following information: Stock/Index Beta AGL Energy Ltd 1.45 CSL Ltd 0.65 ASX200 Index 1.00 The expected return on the market portfolio is 119% and the risk- free rate is 5%. Perform the necessary calculations in order to determine which asset to invest in to obtain the highest return. E(Ri) = Rf.+ Beta x (Rm – Rf) For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac), 10pt E vE A I * Ō 8 Q ... BIUS Paragraph Arial

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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financial advisor evaluates four stocks for inclusion in an investor's portfolio. A orrelation matrix showing each stock's correlation with the other stocks is shown below Stock ALK CMN BTY DLE ALK 0.40 0.58 1.00 -0.25 BTY 0.40 1.00 0.16 -0.04 CMN -.25 .16 1.00 .37 DLE .58 .04 .37 1.00 f the goal is to reduce the investor's overall portfolio risk, which two stocks should the advisor recommend? a. ALK and DLE b. ALK and CMN c. BTY and DLE BTY and CM
An investor has $100,000 to invest. If she invests 40% in Stock A, 30% in Stock B, and the remainder in a market index exchange-traded fund (ETF), calculate the investor's portfolio beta. Beta Stock A 0.75 Stock B 1.4 O a. 1.09 O b. 1.02 O c. 0.65 O d. 1.00
You decide to form a portfolio of the following amounts invested in the following stocks. What is the beta of the portfolio? SET YOUR CALCULATOR TO 4 DECIMAL PLACES THEN INPUT THE ANSWER ROUNDING TO 2 DECIMALS i.e. your answer is 1.2455, enter it as 1.25. Stock Amount Beta Apple $1,118 0.49 Microsoft $8,931 1.61 $4,479 1.36 $5,994 0.76 Ford Time Warner Expected Return 10.50% 16.90% 15.75% 11.80% 3
You have $10,000 to invest in a stock portfolio. Your choices are Stock X with an expected return of 12.4 percent and Stock Y with an expected return of 10.1 percent. If your goal is to create a portfolio with an expected return of 10.85 percent, how much money will you invest in Stock X and Stock Y? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Stock X Stock Y
Assume that you are the portfolio manager of the Forestie Fund, a $3 million hedge fund thatcontains the following stocks. The required rate of return on the market is 11.00% and therisk-free rate is 5.00%. Compute what is the portfolio’s required return should investors expecton this fund? (Please state your answer in 2 decimal points)Stock Amount BetaA $1,075,000 1.20B $675,000 0.50C $750,000 1.40D $500,000 0.75
Sam has her portfolio invested as indicated in the following table. Stock $'s Invested Beta LCAV $150,000 0.50 DFIB $100,000 0.75 GLW $100,000 0.80 DLM $50,000 1.45 Find the beta of Sam's portfolio.
Calculate the required rate of return for the Wagner Assets Management Group, which holds 4 stocks. The market's required rate of return is 17.0%, 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 Select the correct answer
Consider the following information and then calculate the required rate of return for the Global Investment Fund, which holds 4 stocks. The market's required rate of return is 17.50%, the risk-free rate is 3.00%, and the Fund's assets are as follows (Do not round your intermediate calculations.): please show work in excel Stock Investment Beta A $200,000 1.50 B $300,000 -0.50 C $500,000 1.25 D $1,000,000 0.75
You decide to form a portfolio of the following amounts invested in the following stocks. What is the beta of the portfolio? SET YOUR CALCULATOR TO 4 DECIMAL PLACES THEN INPUT THE ANSWER ROUNDING TO 2 DECIMALS i.e. if your answer is 1.2455, enter it as 1.25. Amount Beta $5,817 1.65 Microsoft $4,128 0.54 $2,818 1.67 $8,782 2.27 Stock Apple Ford Time Warner Expected Return 10.50% 16.90% 15.75% 11.80%
You purchase a mutual fund at an offer price of $15.79 per share. If the net asset value is $15.28, find the sale charge percent. Round to the nearest tenth. % Need Help? Read It Watch It Master It
You have $19,000 to invest in a stock portfolio. Your choices are Stock X with an expected return of 15 percent and Stock Y with an expected return of 10 percent. Assume your goal is to create a portfolio with an expected return of 13.15 percent. How much money will you invest in Stock X and Stock Y? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Investment in Stock X Investment in Stock Y
You want to create a portfolio equally as risky as the market, and you have $250,000 to invest. Given this information, fill in the three missing pieces of information in the following table. Show your calculations: Investment Betal 0.90 Asset Stock A $50,000 Stock B $70,000 Stock C Risk-Free Asset 1.25 1.60

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