Suppose you hold a diversified portfolio consisting of a $9,…

Suppose you hold a diversified portfolio consisting of a $9,149 invested equally  in each of 5 different common stocks.  The portfolio’s beta is 0.81.  Now  suppose you decided to sell one of your stocks that has a beta of 0.7 and to  use the proceeds to buy a replacement stock with a beta of 1.1.  What would  the portfolio’s new beta be?

Given the following probability distribution, what are the e…

Given the following probability distribution, what are the expected return and the standard  deviation of returns for Security J? State                      Pi                              rj     1                          0.2                           5%     2                          0.1                           6%     3                          0.7                           15%

Suppose the real risk-free rate is 4.8%,  the average future…

Suppose the real risk-free rate is 4.8%,  the average future inflation rate is  2.4%, and a maturity premium of 0.1% per year to maturity applies, i.e., MRP =  0.1%(t), where t is the years to maturity.  What rate of return would you  expect on a 4-year Treasury security, assuming the pure expectations theory is NOT valid?

Keys Corporation’s 5-year bonds yield 8.1%, and 5-year T-bon…

Keys Corporation’s 5-year bonds yield 8.1%, and 5-year T-bonds yield 6.8%. The real risk-free rate is r* =  1.5%, the inflation premium  for 5 years bonds is  IP = 4.9%, the default risk premium for Keys’ bonds is DRP = 0.54% versus  zero for T-bonds, and the maturity risk premium for all bonds is found with  the formula  MRP =  (t – 1)*0.1%, where t = number of years to maturity.  What  is the liquidity premium (LP) on Keys’ bonds?

A soldier who served in a combat zone returned home to the U…

A soldier who served in a combat zone returned home to the United States. The soldier’s spouse reports to the nurse, “We had planned to start a family right away, but now he won’t talk about it. He won’t even look at children.” The spouse is describing which symptom associated with PTSD?