Maurice Tutor

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Expertise:
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Algebra,Applied Sciences,Biology,Calculus,Chemistry,Economics,English,Essay writing,Geography,Geology,Health & Medical,Physics,Science Hide all
Teaching Since: May 2017
Last Sign in: 402 Weeks Ago
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  • MCS,PHD
    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

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  • Professor
    Phoniex University
    Oct-2001 - Nov-2016

Category > Accounting Posted 18 Aug 2017 My Price 8.00

risk free and risk premium

QUESTION 5

By efficiently diversifying, an investor can:

  a.

Eliminate risk
  b.

Eliminate systematic risk
  c.

Eliminate unsystematic risk
  d.

Can't really have much affect on risk due to market forces

QUESTION 6

Comptron currently trades for a price based upon its last dividend paid of $4, its beta of 1.1 and expected growth of 2%. The risk free and risk premium are 2.5% and 6%, respectively. The new CEO wants to launch new initiatives for growth. In discussing the plans with the CFO, the new initiatives boil down to an increased growth rate to 5%, but at the cost of increasing beta to 1.4 Should the initiatives be undertaken?

  a.

Yes--new stock price should move to $67.49, an increase over its current price.
  b.

Yes--new stock price should move to $71.19, an increase over its current price of $58.29.
  c.

No--new stock price should move to $67.49, a decrease from its current price.
  d.

No--new stock price should move to $71.19, a decrease from its current price.

QUESTION 7

An investor has put money in four stocks in the dollar amounts indicated and with betas specified. What is the portfolio beta? Stock A $3,456 with a beta of 1.27; stock B $7,148 with a beta of 1.13; stock C $4,151 with a beta of 0.93; and stock D $7,704 with a beta of 1.31. Show your answer rounded to two decimal points.

Step by step inputs please!

Answers

Maurice Tutor
(5)
Status NEW Posted 18 Aug 2017 11:08 PM My Price 8.00

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