1.A corporate bond that you own at the beginning of the year is worth $935. Duri

Question

1.A corporate bond that you own at the beginning of the year is worth $935. During the year, it pays $57 in interest payments and ends the year valued at $925.

What was your dollar return and percent return? (Round your percent return answer to 2 decimal places.)

  Dollar return $
  Percent return %

2.

Year-to-date, Oracle had earned a 1.52 percent return. During the same time period, Valero Energy earned 8.04 percent and McDonald's earned 0.68 percent.

If you have a portfolio made up of 20 percent Oracle, 25 percent Valero Energy, and 55 percent McDonald's, what is your portfolio return? (Round your answer to 2 decimal places.)

  Portfolio return %

3.

At the beginning of the month, you owned $9,000 of General Dynamics, $4,000 of Starbucks, and $7,000 of Nike. The monthly returns for General Dynamics, Starbucks, and Nike were 6.60 percent, 1.48 percent, and 0.60 percent. What is your portfolio return? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

%

4.

You own $10,461 of Olympic Steel stock that has a beta of 2.97. You also own $16,167 of Rent-a-Center (beta = 1.56) and $20,922 of Lincoln Educational (beta = 0.95).

What is the beta of your portfolio? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

  Portfolio beta   

5.

You own $25,080 of Human Genome stock that has an assumed beta of 3.72. You also own $13,376 of Frozen Food Express (assumed beta = 1.87) and $3,344 of Molecular Devices (assumed beta = 0.46).

What is the beta of your portfolio? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

  Portfolio beta   

At the beginning of the month, you owned $9,000 of General Dynamics, $4,000 of Starbucks, and $7,000 of Nike. The monthly returns for General Dynamics, Starbucks, and Nike were 6.60 percent, 1.48 percent, and 0.60 percent. What is your portfolio return? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

Explanation / Answer

1. Dollar return = Year end value of bond + Interest payment - Begining value of bond

= $925 + $57 - $935

= $47

Percentage return = [(Year end value of bond + Interest payment) / Begining value of bond - 1] * 100%

= [($925 + $57) / $935 - 1] * 100%

= 5.03%

2. Portfolio return = Weightage of Oracle * Return of Oracle + Weightage of Valero Energy * Return of Valero Energy + Weightage of McDonald's * Return of McDonald's

= 20 % * (-1.52%) + 25% * 8.04% + 55% * 0.68%

= 2.08%

3. Portfolio return = (Investment of General Dynamics* Return of General Dynamics + Investment of Starbucks * Return of Starbucks + Investment of Nike * Return of Nike) / Total investment

= [$9000 * 6.6% + $4000 * (-1.48%) + $7000 * (-0.60%)] / ($9000 + $4000 + $7000)

= 2.46%

4. Portfolio beta = (Investment of Olympic Steel * Beta of Olympic Steel + Investment of Rent-a-Center * Beta of Rent-a-Center + Investment of Lincoln Educational * Beta of Lincoln Educational) / Total investment

= ($10,461 * 2.97 + $16,167 * 1.56 + $20,922 * 0.95) / ($10,461 + $16,167 + $20,922)

= 1.60

5. Portfolio beta = (Investment of Human Genome * Beta of Human Genome + Investment of Frozen Food Express * Beta of Frozen Food Express + Investment of Molecular Devices  * Beta of Molecular Devices ) / Total investment

= ($25,080 * 3.72 + $13,376 * 1.87 + $3,344 * 0.46) / ($25,080 + $13,376 + $3,344)

= 2.87

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.