Required Information[The following information applies to the questions displayed below.]Stock Values Across Portfolios$10,000$8,000$5,000$4,000$2,000$020.009630.00%$5,000$3,000$2,000A+ableau$2,000$5,000Stock Portfolios50.00%$2,5008,000$2,50050.00%15%B10%5%0%Portfolio Investment Percentage by StockStockLarge-capMid-capSmall-capExpected ReturnsLarge-cap Mid-cap20.009620 20%25.00%с50.00%OSmall-cap2500%A financial manager is reviewing three potential portfolios. His goal is to find the est portfolio structure for each of his three neclients: Client Risk A. Verse, Client Steady Dozit, and Client Risky Roller. Each of his new clients has $10,000 to invest. The followingTableau Dashboard provides information on the three possible portfolios and stock returns.Required:1. What is the percentage of mid-cap stock investment in Portfolio A?2. What is the percentage of large-cap stock investment in Portfolio B?3. What is the percentage of small-cap stock investment in Portfolio C?

Portfolio Small-cap Mid-Cap Large-Cap A $ 2,000.00 $ 3,000.00 $ 5,000.00 B $…

A financial manager is reviewing three potential portfolios. His goal is to find the best portfolio structure for each of his three new clients: Client Risk A. Verse, Client Steady Dozit, and Client Risky Roller. Each of his new clients has $10,000 to invest. The following Tableau Dashboard provides information on the three possible portfolios and stock returns. Required: 1. What is the percentage of mid-cap stock investment in Portfolio A? 2. What is the percentage of large-cap stock investment in Portfolio B?

A financial manager is reviewing three potential portfolios. His goal is to find the best portfolio structure for each of his three new clients: Client Risk A. Verse, Client Steady Dozit, and Client Risky Roller. Each of his new clients has $10,000 to invest. The following Tableau Dashboard provides information on the three possible portfolios and stock returns. Required: 1. What is the percentage of mid-cap stock investment in Portfolio A? 2. What is the percentage of large-cap stock investment in Portfolio B?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Consider the following three stocks: Stock Price Number of shares outstanding Stock A $ 40 200 Stock B $ 70 500 Stock C $ 10 600 Assume at these prices that the value-weighted index constructed with the three stocks is 490. What would the index be if stock B is split 2 for 1 and stock C 4 for 1? A) 265 B) 430 C) 355 D) 490 E) 1000Please Provide Justification
Practice, Practice, Practice! Question 1: An investor wants to evaluate the $2.5 million portfolio described below: Stock I II III IV V Stock's Beta Stock's Expected Return Portfolio Composition 15% 8% 16.25% 12.50% 9% 1.3 0.7 1.25 1.1 0.9 $750,000 $250,000 $500,000 $500,000 $500,000 $2,500,000 Proportions 0.30 0.10 0.20 0.20 0.20 The market rate of return is 11.5 % and the risk free rate is 5.25%. A. Compute the expected return of the 5-asset portfolio. B. Compute the weighted-average beta and the expected return according to CAPM for this 5-asset portfolio. C. Based on the above calculations, would you recommend for or against investing in this portfolio. Briefly explain your answer.
Martin Ortner holds a $200,000 portfolio consisting of the following stocks: Stock Investment Beta A $50,000 0.95 B 50,000 0.80 C 50,000 1.00 D 50,000 1.20 Total $200,000 What is the portfolio's beta? a. 0.938 b. 0.988 c. 1.037 d. 1.089 e. 1.143
What is the expected return for the following portfolio? (State your answer in percent with two decimal places.) Stock Expected returns Investment AAA 35% $500,000 BBB 29% $1,300,000 CCC 18% $1,200,000 DDD 7% $1,500,000 O.17.13% O.19.40% O.21.01% O.22.21% O.23.88%
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Consider the following information on two stocks: P(State) Stock A Stock B Boom 20% 30% 20% Normal 50% 12% -5% Slow 15% 4% 8% Recession 15% -10% 10% $Investment Beta Asset B Asset A $35,000 $15,000 1.45 0.85 Calculate the weight of A in the portfolio. (Enter percentages as decimals and round to 4 decimals)
9. Portfolio beta and weights Rafael is an analyst at a wealth management firm. One of his clients holds a $10,000 portfolio that consists of four stocks. The investment allocation in the portfolio along with the contribution of risk from each stock is given in the following table: Stock Atteric Inc. (AI) Arthur Trust Inc. (AT) Li Corp. (LC) Transfer Fuels Co. (TF) Investment Allocation O 0.9009 percentage points O 1.4322 percentage points 35% 20% 15% 30% 1.1550 percentage points O 1.3283 percentage points Beta 0.900 1.400 1.100 0.300 O Undervalued Standard Deviation Rafael calculated the portfolio's beta as 0.850 and the portfolio's required return as 8.6750%. Rafael thinks it will be a good idea to reallocate the funds in his client's portfolio. He recommends replacing Atteric Inc.'s shares with the same amount in additional shares of Transfer Fuels Co. The risk-free rate is 4%, and the market risk premium is 5.50%. 23.00% 27.00% According to Rafael's recommendation, assuming that…
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Portfolio beta and weights Brandon is an analyst at a wealth management firm. One of his clients holds a $5,000 portfolio that consists of four stocks. The investment allocation in the portfolio along with the contribution of risk from each stock is given in the following table: Stock Investment Allocation Beta Standard Deviation Atteric Inc. (AI) 35% 0.750 38.00% Arthur Trust Inc. (AT) 20% 1.500 42.00% Li Corp. (LC) 15% 1.100 45.00% Baque Co. (BC) 30% 0.300 49.00% Brandon calculated the portfolio’s beta as 0.818 and the portfolio’s required return as 8.4990%. Brandon thinks it will be a good idea to reallocate the funds in his client’s portfolio. He recommends replacing Atteric Inc.’s shares with the same amount in additional shares of Baque Co. The risk-free rate is 4%, and the market risk premium is 5.50%. According to Brandon’s recommendation, assuming that the market is in equilibrium, how much will the portfolio’s required return change?…

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