Question 14 1 pts Your broker has developed a list of firms, their betas, and...
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Question 14 1 pts Your broker has developed a list of firms, their betas, and the return he expects the stock to yield over the next twelve months (labeled "Expected Return"). You have estimated that the risk-free rate is 5% and the return to the market will be 12%. Assuming that CAPM is correct, which stock should you purchase? Firm Beta Expected Return Anderson, Inc. 0.75 10.5% Delta Vanlines 1.24 13.0% Nathan's 1.60 16.0% Bakeries Z-man 2.15 19.0% Electronics All of the stocks O Delta Vanlines Nathan's Bakeries Zaman Electronics Anderson, Inc. Question 15 1 pts You decide to form a portfolio of the following amounts invested in the following stocks. What is the expected return of the portfolio? SET YOUR CALCULATOR TO 4 DECIMAL PLACES THEN INPUT THE NUMBER AS PERCENTAGE ROUNDING TO 2 DECIMALS. DO NOT ENTER THE % SYMBOL...e. if your answer is 7.77%. enter it as 7.77 Stock Amount Beta Apple $2,386 2.40 Microsoft $3,081 0.73 Ford $2,394 1.95 Time $7,777 1.27 Warner Expected Return 14.21% 11.55% 16.47% 18.27%
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