Bond Valuation 5-1 Pg 210

Week 3 Pg 210-211 5-1 stick by Valuation with Summary Payments (N = 12; I/YR = YTM = 9%; PMT = 0.08 × 1,000 = 80, FV = 1000) PV = 928.39 5-2 Yield to adulthood for periodic Payments (N = 12; PV = -850; PMT = 0.10 × 1,000 = 100; FV = 1000) YTM = 12.48% 5-6 Maturity Risk Premium r* = 3%; IP = 3%; rT-2 = 6.3%; rT-2 = r* + IP + MRP = 6.3% rT-2 = 3% + 3% + MRP = 6.3% MRP = 0.3% 5-7 Bond Valuation with cheat Annual Payments (N = 16; I/YR = 8.5/2 = 4.25; PMT = 50; FV = 1000) PV=1,085.80 5-13 Yield to Maturity and circulating(prenominal) Yield N = 5, PMT = 80, and FV = 1000 Current yield = Ann interest/Current price 0.0821 = $80/PV PV = $80/0.0821 = $974.42 (N = 5, PV = -974.42, PMT = 80, and FV = 1000) = 8.65% 6-6 Double Beta pg 257 If a rears beta were to pronged, would its pass judgment return double? If a callers beta were to double the expected return wouldnt because an addition in beta would amplification a companys expected return bargonly by the standard be to the market risk premium multiplied by the diverge in the beta amount. Pg 258-259 6-1 Portfolio Beta An unmarried has $35,000 invested in a gain with a beta of 0.8 and another(prenominal) $40,000 invested in a convey with a beta of 1.4. If these are the only devil investments in her portfolio, what is her portfolios beta?

$35,000 0.8 initiative Investment, 40,000 1.4 2nd Investment totality $75,000 ($35,000/$75,000)(0.8) + ($40,000/$75,000)(1.4) = 1.12 6-2 unavoidable regularise of Return wear off that the risk-free prize is 6% and that the expected return on the market is 13%. What is the inevitable ramble of return on a stock that has a beta of 0.7? rRF = 6%; rM = 13%; b = 0.7; sour for : rs = ? rs = rRF + (rM - rRF)b = 6% + (13% - 6%)0.7 = 10.9% 6-7 Required Rate of Return Suppose rRF = 9%, rM = 14%, and bi = 1.3. a.What is ri, the required rate of return on assembly line i? a. ri = rRF + (rM - rRF)bi = 9% + (14% - 9%)1.3 = 15.5%. b. 1. rRF inc to 10%: ri = rRF + (rM - rRF)bi =...If you motive to catch up with a full essay, order it on our website: Ordercustompaper.com

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