I need help with my Risk & Returns
1. You own a portfolio that has $1300 invested in Stock A and $2100 invested in Stock B. If the expected returns on these stocks are 10% and 16%, respectively what is the expected return on the portfolio?
2. You own a portfolio that has $1300 invested in Stock A and $2100 invested in Stock B. If the expected returns on these stocks are 10% and 16%, respectively, what is the expected return on the portfolio?
4. You have $10,000 to invest in a stock portfolio. Your choices are Stock X with an expected return of 14% and Stock Y with an expected return of 11%. If your goal is to create a portfolio with an expected return of 12.4%, how much money will you invest in Stock X? Stock Y?
5. Based on the following info, calculate the expected return
State of Economy Probability of state of economy Rate of Return if state occur
Recession | .30 | -.08 |
Boom | .70 | .19 |
8. Expected returns: A portfolio is invested 20% in Stock G, 35% in Stock J, and 45% in Stock K. The expected returns on these stocks are 9.2%, 12%, and 15.7%. What is the portfolios expected return? How do you interpret your answer?
12. You own a portfolio equally invested in a risk free asset and two stocks. If one of the stocks has a beta of 1.42 and the total portfolio is equally as risky as the market, what must the beta be for the other stock in your portfolio?
15. Using CAPM: A stock has an expected return of 10.9%, its beta is .85, and the risk-free rate is 4.6%. What must the expected return on the market be?
16. Using CAPM: A stock has an expected return of 12.5% and a beta of 1.15, and the expected return on the market is 11.5%. What must the risk-free rate be?
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