QUESTION 1
You have invested $40,134 portfolio in three securities. The three securities comprise of the risk-free asset, Stock A, and Stock B. The beta of stock A is 2.1 while the beta of stock B is 0.7. 10% of the portfolio is invested in the risk-free security. What is the dollar amount invested in stock B if the beta of the portfolio is 1.2?
QUESTION 2
You have a $59,342 portfolio that consists of $12,800 invested in Stock A, $13,698 invested in Stock B, $1,277 invested in Stock C, and the remainder in Stock D. The portfolio has a return of 19.8 percent. The return for Stock A is 6.5 percent, for Stock B is 33.2 percent, and for Stock C is 7.2 percent. What is the return for Stock D?
QUESTION 3
Based on the following cash flows, calculate the payback period.
Year CF
0 -$168
1 $36
2 $27
3 $20
4 $303
Enter your answer rounded off to two decimal points.
QUESTION 4
What is the modified internal rate of return (MIRR) of this project? Assume that the required rate is 12%
Year CF
0 -$5,500
1 $ 450
2 $1,800
3 $3,200
4 $ 550
5 $2,130