1. How does the price-earnings ratio indicate the relative valuation of earnings? Explain in detail
2. Martin Ortner holds a $200,000 portfolio consisting of the following stocks: Stock Investment Beta A $50,000 0.82 B 50,000 1.5 C 50,000 1.87 D 50,000 2.36 Total $200,000 What is the portfolio's beta?
3.. If 10-year T-bonds have a yield of 9.4%, 10-year corporate bonds yield 12.7%, the maturity risk premium on all 10-year bonds is 1.4%, and corporate bonds have a 0.7% liquidity premium versus a zero liquidity premium for T-bonds, what is the default risk premium on the corporate bond in percent?