Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. (28) 1. consider historical data showing that the

(28) 1. Consider historical data showing that the average annual rate of return on the...

50.1K

Verified Solution

Question

Finance

image
(28) 1. Consider historical data showing that the average annual rate of return on the S&P 500 portfolio over the past 80 years has averaged roughly 9% more than Treasury bill return and that the S&P 500 standard deviation has been about 15% per year. Assume these values are representative of investors' expectations for future performance and that the current T-bill rate is 6% Calculate the expected return and variance of portfolios invested in T-bills and the S&P 500 index with weights as follows: (10 points) Wk 0 LC 0.2 0.8 04 0.6 0.8 0.2 1.0 2. What must be the beta of a portfolio with Er,)20%, if F5% and E)15% ? (10 points) MF Corp. has an ROE of 16% and a plowback ratio of 50%. If the coming year's earnings are expected to be $2 per share, at what price wil the stock sell? The market capitalization rate is 12% b. What price do you expect MF shares to sell for in 3 years? (8points) 3. a

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Biology
1.2K views

Choose the correct answer. Watch out for sites that use agenda exploratory argumentative techniques to...

Biology
1.2K views

An exchange surface in direct contact with the external environment is found in the skeletal...

Physics
1.2K views

The displacement of a spring vibrating in damped harmonic motion is given by the following...

Physics
1.2K views

their potential energies What is the kinetic energy of a body of mass 1 kg...

Calculus
1.2K views

In each part a function f x and interval a b are given Check if...

Algebra
1.2K views

Maximize p 10x 10y 15z subject to x y z 14 2x 2y z 15...

Accounting
1.2K views

Manley operates a law practice on the accrual method and calendar year. At the beginning...

Accounting
1.2K views

Thermal Rising, Incorporated, makes paragliders for sale through specialty sporting goods stores. The company has...

Accounting
1.2K views

Budgetary Performance for Cost Center Georgia Company's costs were under budget by $52,200. The company...

Finance
1.2K views

The US Treasury issues Inflation-Protected Securities, also known as TIPS. TIPS are issued with maturities...

Accounting
1.2K views

I need help with this question ASAP please? What are the...

Finance
1.2K views

Question 15 1 pts A firm has a market capitalization of $2 million, market value...