1. You want to create a portfolio equally as risky as the market, and you have $1,500,000 to invest. Given this information, fill in the rest of the following table: (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) Asset Investment Beta
Stock A $ 165,000 1.40
Stock B $ 270,000 1.60
Stock C $ _______? 2.00
Risk-free asset $____? _____?
2. Compute the NPV statistic for Project U if the appropriate cost of capital is 10 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Project U Time: 0 1 2 3 4 5
Cash flow –$2,250 $650 $2,230 –$670 $600 –$250