Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. reynolds inc holds a well-diversified portfolio in

Reynolds Inc holds a well-diversified portfolio in the amount of $90,000 that has an expected...

90.2K

Verified Solution

Question

Finance

Reynolds Inc holds a well-diversified portfolio in the amount of $90,000 that has an expected return of 11.0% and a beta of 1.13. It is buying 1,000 shares of Microsofter Company stock at $10 a share and adding them to its portfolio. Microsofter Company has an expected return of 13.0% and a beta of 1.41. Currently, the risk free rate is 2.5%, and the stock market return is 7.88%.

What will the required rate of return on the new portfolio be after the purchase of Microsofter stock?

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

Finance
1.2K views

10-4. Do you think that currency speculators perform a valuable service by correcting overvalued or undervalued currencies?

Chemistry
1.2K views

Determine the term symbols for : A) 3P2 , B) s1p1d1 electron configuration. C) Determine the energy free...

Advance Math
1.2K views

Write a Matlab function for: 1. Root Finding: Calculate the root of the equation f(x)=x^3 ?5x^2 +3x?7 Calculate...

Biology
1.2K views

Q5 7 In a population where the proportion of individuals who are susceptible to malaria...

Statistics
1.2K views

In the past 26 of all homes with a stay at home parent had the...

Algebra
1.2K views

10 8 6 4 2 6 5 4 3 2 1 IN 2 4 6...

Accounting
1.2K views

Selected comparative financial statements of Korbin Company follow KORBIN...

Accounting
1.2K views

To emphasise auditor independence from management, many entities follow the practice of: Select one: a....

Accounting
1.2K views

Accounting
1.2K views

On December 31, 2020, Berclair Inc. had 200 million shares of common stock and 3...

Finance
1.2K views

I want to fill in only one tables form Proceeding International Seminar on...

Finance
1.2K views

A bond with a face value of $1,000 and an annual coupon rate of 6.25%...