Description of this paper

Stock Allocation Beta Std Deviation Smi...

Description

Solution


Question

Stock Allocation Beta Std Deviation Smith & T 35% 0.90 43% Arthur Trust 20% 1.60 47% Galaxy Corp 15% 1.12 50% Transfer Fuels 30% 0.30 54% The portfolio beta is .89 & the expected return is 15.01%. It is recommended replacing Smith & T shares with the same amount of additional shares of Transfer Fuels. The risk free rate is 7% & the market risk premium is 9%. Assuming that the market is in equilibrium, how much will the required return change? 2.14% 2.31% 1.45% 1.86% The analyst expects a return of 11.65% from the portfolio with the new weights. Based on the changes to the portfolio is it: Fairly valued Overvalued Undervalued

 

Paper#8910 | Written in 18-Jul-2015

Price : $25
SiteLock