25 May Question 101. Portfolio Beta and Required Return You hold the positi
Question
101. Portfolio Beta and Required Return You hold the positions in the table below. What is the beta of your portfolio? If you expect the market to earn 14 percent and the risk-free rate is 5 percent, what is the required return of the portfolio?
| Price | Shares | Beta | |
| Website.com | $20.50 | 100 | 3.2 |
| Budget Stores | $36.20 | 150 | 1.5 |
| Manufacturing Corp | $60.70 | 75 | 2.4 |
| Pharmacy Corp | $28.40 | 200 | 0.75 |
a. 20.21%
b. 22.66%
c. 28.66%
d. 32.48%
[QUESTION]
102. Portfolio Beta and Required Return You hold the positions in the table below. If you expect the market to earn 10 percent and the risk-free rate is 4 percent, what is the required return of the portfolio?
| Price | Shares | Beta | |
| Website.com | $25.00 | 1000 | 3.4 |
| Budget Stores | $38.25 | 2000 | 1.8 |
| Manufacturing Corp | $62.50 | 700 | 2.6 |
| Pharmacy Corp | $22.75 | 300 | 0.6 |
a. 16.60%
b. 17.44%
c. 25.00%
d. 26.40%
[QUESTION]
103. Portfolio Beta You hold the positions in the table below. What is the beta of your portfolio?
| Price | Shares | Beta | |
| TechNo Comp | $15.25 | 2000 | 4.0 |
| Delivery Corp | $105.00 | 500 | 1.4 |
| Computer Corp | $35.40 | 300 | 0.9 |
| Food Corp | $18.75 | 200 | -0.7 |
a. 1.4
b. 2.08
c. 2.13
d. 5.6
[QUESTION]
104. Portfolio Beta You hold the positions in the table below. What is the beta of your portfolio?
| Price | Shares | Beta | |
| TechNo Comp | $14.25 | 100 | 3.5 |
| Delivery Corp | $110.00 | 200 | 1.6 |
| Computer Corp | $26.90 | 150 | 1.2 |
| Food Corp | $19.20 | 150 | -0.5 |
a. 1.44
b. 1.46
c. 1.53
d. 5.8
[QUESTION]
105. Required Return Using the information in the table, compute the required return for each company using both CAPM and the constant growth model. Compare and discuss the results. Assume that the market portfolio will earn 11 percent and the risk-free rate is 2.5 percent.
| Price | Upcoming Dividend | Growth |
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