Donald Gilmore has $100,000 invested in a 2-stock portfolio.$20,000 is invested in Stock X and the remainder is invested inStock Y. X's beta is 1.50 and Y's beta is 0.70. What is theportfolio's beta?
Zacher Co.'s stock has a beta of 1.12, the risk-free rate is4.25%, and the market risk premium is 5.50%. What is the firm'srequired rate of return?
Porter Plumbing's stock had a required return of 14.25% lastyear, when the risk-free rate was 5.50% and the market risk premiumwas 4.75%. Then an increase in investor risk aversion caused themarket risk premium to rise by 2%. The risk-free rate and thefirm's beta remain unchanged. What is the company's new requiredrate of return? (Hint: First calculate the beta, then findthe required return.)
Select the correct answer.
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Stock A's stock has a beta of 1.30, and its required return is13.25%. Stock B's beta is 0.80. If the risk-free rate is 4.75%,what is the required rate of return on B's stock? (Hint:First find the market risk premium.) |
Fiske Roofing Supplies' stock has a beta of 1.23, its requiredreturn is 11.50%, and the risk-free rate is 4.30%. What is therequired rate of return on the market? (Hint: First findthe market risk premium.)
Select the correct answer.
