1. Investment X has the following projected cash flows over the next four years: Year Amount 1 $6500 2 $7500 3 $3100 4 $1900 If the opportunity cost for an investment of this level of risk is 8.1%, what is the most that you should be willing to pay for it?
2. During a period of economic growth we would expect interest rate to increase, Why?
3. You have a portfolio with a beta of 1.15. What will be the new portfolio beta if you keep 91 percent of your money in the old portfolio and 9 percent in a stock with a beta of 0.34? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
New portfolio beta