Answer:
Yes, there is an opportunity.
Explanation:
Beta is an indicator of the risk of any portfolio. The higher beta, the greater the risk. Therefore, the expected return of that portfolio should be higher.
Portfolio B has a higher Beta than portfolio A, but a lower expected return, so we say that the portfolio B is more expensive than it's value. So, there is an opportunity for arbitrage. You should sell the protfolio B and buy the portfolio A, and win the difference between both operations, with no risk.
Answer:
what are you saying tell me
Answer:
$116.78
$110.66
IRR is 3.03%
Find attached
Explanation:
The cash paid for the investment is the present value of all cash flows including coupon and face value promised by the bond discounted using the yield to maturity of 3.03%
=-pv(rate,nper,pmt,fv)
rate is the yield to maturity of 3.03%
nper is the number of annual coupon payments receivable by bondholders which is 10
pmt is the annual coupon=$100*5%=$5
fv is the face value of $100
=-pv(3.03%,10,5,100)=$116.78
Price after four years means that there are only six years left to maturity,hence, nper changes to 6
=-pv(3.03%,6,5,100)=$110.66
