1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
pochemuha
2 years ago
12

Assume that you hold a well-diversified portfolio that has an expected return of 11.0% and a beta of 1.20. The total value of yo

ur current portfolio is $90,000. You are in the process of buying 1,000 shares of Alpha Corp at $10 a share and adding it to your portfolio. Alpha has an expected return of 13.0% and a beta of 1.50. What will the expected return and beta on the portfolio be after the purchase of the Alpha stock
Business
1 answer:
diamong [38]2 years ago
7 0

Answer:

hope this helps

Assume that you hold a well-diversified portfolio that has an expected return of 11.0% and a beta of 1.20. You are in the process of buying 1,000 shares of Alpha Corp at $10 a share and adding it to your portfolio. Alpha has an expected return of 21.5% and a beta of 1.70. The total value of your current portfolio is $90,000. What will the expected return and beta on the portfolio be after the purchase of the Alpha stock? Do not round your intermediate calculations.

Old portfolio return

11.0%

Old portfolio beta

1.20

New stock return

21.5%

New stock beta

1.70

% of portfolio in new stock = $ in New / ($ in old + $ in new) = $10,000/$100,000=

10%

New expected portfolio return = rp = 0.1 × 21.5% + 0.9 × 11% =

12.05%​

New expected portfolio beta = bp = 0.1 × 1.70 + 0.9 × 1.20 =

1.25​

Explanation:

You might be interested in
On January 1, 2009, Diego owed $14,033 to his friend Ricardo, who was kind enough not to charge Diego any interest. Each month d
aleksandrvk [35]

Answer:

$481

Explanation:

Amount paid = Amount lent - Amount left

Amount paid = $14,033 - $8,261

Amount paid = $5,772

Average amount paid each month = Amount paid / Number of months

Average amount paid each month = $5,772 / 12

Average amount paid each month = $481

So, the average amount of Diego's monthly payments is $481.

6 0
2 years ago
Ben and Jerry were shareholders of Water Ice Inc., an S corp. On Jan. 1, 1998, Ben owned 40 shares and Jerry owned 60 shares. Be
expeople1 [14]

Answer: $15,060

Explanation:

From the question, we are informed that Ben and Jerry were shareholders of Water Ice Inc., an S corp. On Jan. 1, 1998, Ben owned 40 shares and Jerry owned 60 shares.

We are further told that Ben sold his shares to Joe for $10,000 on March 31, 1998 and that the corp. reported a $50,000 loss at the end of 1998. The loss that will be allocated to Joe will be:

= $50,000 × 40% × 9/12

= $50,000 × 0.4 × 0.75

= $15,000

The closest figure we have close to that is $15,060 which is option B

7 0
3 years ago
Extrinsically motivated behavior is that which is performed out of a desire to work for the welfare of society.a. Trueb. False
ipn [44]

Answer:  false

Explanation: Extrinsic motivation relates to actions motivated by incentives from the outside, such as wealth, popularity, promotions, and recognition. This form of motivation comes from the outside of the person, as contrasted to the internal motivation that comes from within the person.  

Extrinsic motivation is commonly defined as the inclination to participate in activities to receive some kind of perceived outward benefit. It is worth noting that either physical or mental in essence can be these incentives. Thus, from the above we can conclude that the above statement is false.

6 0
3 years ago
Albert just purchased a​ $1,000, 5.4%, 10minusyear bond when he heard about his friend Charlie who just bought a equal quality b
svetoff [14.1K]

Answer:

A) interest rate

Explanation:

Interest rate risk refers to the risk of purchasing a bond that offers a certain coupon and then the price of that bond changes due to changes in the market interest rate.

This can work in your favor, if the market interest rate decreases, you will have a bond that pays above market coupon, which will increase the market value of the bond. But if the market interest rate increases, the market value of your bond will decrease, and you will lose money. This is what happened to Albert, since the market interest rate increased, the value of Albert's bond decreased.

8 0
3 years ago
The additional security option, used for credit card transactions, that keeps track of a customer’s historical shopping patterns
Otrada [13]

Answer: the correct answer is d. transaction-risk scoring software.

Explanation: The additional security option, used for credit card transactions, that keeps track of a customer’s historical shopping patterns and notes deviations from the norm is <u>transaction-risk scoring software.</u>

3 0
3 years ago
Other questions:
  • A company failed to record unrealized gains of $26 million on its debt investments classified as trading securities. Its tax rat
    10·1 answer
  • Scenario 1: Individual Retirement Accounts (IRAs) allow people to shelter some of their income from taxation. Suppose the maximu
    8·1 answer
  • Allison buys equipment and pays cash of $50,000, signs a note of $10,000 and assumes a liability on the property for $3,000. In
    14·1 answer
  • Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of return that she is earning.
    15·1 answer
  • When medicare was passed in 1965, its sponsors said it would cost about ____ a year?
    12·1 answer
  • B&amp;T Company's production costs for May are: direct labor, $18,000; indirect labor, $5,800; direct materials, $14,200; proper
    5·1 answer
  • Use the following information for Exercises 8-9 below. (Static)[The following information applies to the questions displayed bel
    7·1 answer
  • Both ________ and ________ are monetary liabilities of the fed.
    12·1 answer
  • Ann Hopkins borrowed $60,000 for her child’s education. She must repay the loan at the end of 8 years in one payment with 512% i
    11·1 answer
  • The systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organiza
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!