A friend tips you off on a hot stock: Sure Thing Mines Ltd. You only have $10,000 to invest but you want to invest more. Assume that you can borrow an additional $5,000 by short-selling the risk free asset (issuing T-Bills)
You purchase $15,000 worth of shares in Sure Thing Mines Ltd.
The expected returns and standard deviations of the two assets are outlined in the table below:
Asset Expected Return Beta
T-Bills 5.5% 0
Sure Thing Mines 15% 1.70
What is the beta of the portfolio?
A) 1.50
B) 1.70
C) 2.50
D) 2.55
E) 2.70
D
You might also like to view...
Which of the following reduces the risk of moral hazard and the bank's risk in making loans?
A. Collateral B. Adverse selection C. Fixed interest rate D. Securitization
_____ applications can easily answer questions such as, "Where are my weakest-performing sales offices?"and "What products are selling well?"
Fill in the blank(s) with the appropriate word(s).
Which of the following tasks within an airline company are related to operations?
A) crew scheduling B) international monetary exchange C) sales D) advertising E) accounts payable
New Corporation had net income for 2016 of $80,000
New Corporation had 13,000 shares of common stock outstanding at the beginning of the year and 24,000 shares of common stock outstanding at the end of the year. There were 12,000 shares of preferred stock outstanding all year. During 2016, New Corporation declared and paid preferred dividends of $21,000. What is New Corporation's earnings per share? (Round the answer to two decimal places.) A) $3.33 B) $3.19 C) $4.32 D) $2.46