Ayooooo who wanna be my guy bestfriend?!? 12-14 snap??
2 answers:
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Answer:
11.11%
Explanation:
<em><u>The full question with table is attached.</u></em>
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We need the rate of return formula using Capital Asset Pricing Model (CAPM). The formula is:
Where
R is rate of return (what we need)
is risk-free return rate (5% = 0.05)
is the market rate of return (11% = 0.11)
To get , we take the weighted average of the portfolio.
Weight of Stock A = 1,075,000/3,000,000 = 0.3583
Weight of Stock B = 675,000/3,000,000 = 0.225
Weight of Stock C = 750,000/3,000,000 = 0.25
Weight of Stock D = 500,000/3,000,000 = 0.1667
Portfolio Beta = (0.3583*1.2) + (0.225*0.50) + (0.25*1.40) + (0.1667*0.75) = 1.02
Now, we calculate rate of return using CAPM formula:
That is 11.12%, or from answer choice, it is <u>11.11%</u>
Answer:
1. 5.00%
2. 15.70 year
Explanation:
As per the data given in the question,
1) For computing the interest rate we need to applied the RATE formula which is shown in the attached spreadsheet
Given that
Future value = 0
Present value = -$2587.09
PMT = $950
NPER = 3 years
The formula is shown below:
= RATE(NPER;PMT;-PV;FV)
The present value comes in negative
After applying the above formula, the interest rate is 5%
2) For computing the number of years we need to use NPER i.e to be shown in the attachment below
Given that
Future Value = $920,925
Present Value = 0
PMT = -$40,000
Interest rate = 5%
The formula is shown below
= NPER(RATE;-PMT;PV;FV)
The PMT comes in negative
After applying the above formula, the nper is 15.70 years
