Subject | Business |

Due By (Pacific Time) | 12/04/2016 12:00 am |

#14) The following table contains beta coefficient estimates for six firms. Calculate the expected increase in the value of each firm's shares if the market portfolio were to increase by 10%. Perform the same calculation where the market drops by 10%. Which set of firms has the most variable or volatile stock returns? Input the expected increase in the value of each firm's shares if the market portfolio were to increase by 10% (round each answer to two decimal paces).

company yahoo finance expected beta estimate increase computers & software

Apple Inc. (APPL) 2.23 %

Dell Inc. (Dell) 1.35 %

Hewlett Packard (HPQ) 1.38 %

utilities

American Electric Power Co. (AEP) 0.76 %

Duke Energy Corp. (DUK) 0.51 % Centerpoint Energy (CNP) 0.93 %

#15) You are putting together a portfolio made up of four different stocks. However you ae considering two possible weightings:

asset beta 1st portfolio 2nd portfolio

A 2.40 20% 30%

B 0.85 20% 30%

C 0.40 30% 20%

D -1.40 30% 20%

(A) beta on irst portfolio-------------(round to three decimal places (B) Which portfolio is riskier? a) second portfolio because the beta is smaller. b) second portfolio because the beta is larger. c)first portfolio because the beta is smaller. d)first portfolio because the beta is larger. (C) If the risk free rate of interest were 4.5% and the market risk premium were 7.5% then the rate of return on the first portfolio is expected to be -----------%( round to two decimal places). If the risk free rate of interest were 4.5 % and the market risk premium were 7.5%, then the rate of rreturn on the second portfolio is expected to be -------------%( round to two decimal places).

#16) A bond's market price is $800. It has a $1,000 par value, will mature in 12 yrs, and has a coupon interest rate of 11% annual interest, buy makes its interest payments semiannually. What is the bond's yield to maturity? What happens to the bond's yield to maturity if the bond matures in 24 yrs? What if it matures in 6 yrs? a)bond's yield to maturity if it matures in 12 yrs. is--------% (round to two decimal places). (b) bond's yield to maturity if it matures in 24 yrs. is ------------%(round to two decimal places). (c) bond's yield to maturity if it matures in 6 yrs. is ----------%(round to two decimal places)

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