Question
In: Finance
You hold $10 million in stock with a portfolio beta of 1.15. You write three APR...
You hold $10 million in stock with a portfolio beta of 1.15. You write three APR 750 OEX puts
at a $25.00 premium and write three APR 700 OEX calls at a $25.00 premium. Estimate the total
portfolio gain if, at option expiration, the S&P 100 index is 775.00 and the current level of the
index is 725.00?
Solutions
jeff jeffy answered 1 week agoRelated Solutions
You have been managing a $10 million portfolio that has a beta of 1.15 and a...
You have been managing a $10 million portfolio that has a beta
of 1.15 and a required rate of return of 5.75%. The current
risk-free rate is 2%. Assume that you received another $1.5
million. If you invest the money in a stock with beta of 0.85, what
will be the required rate of return on your $11.5 million
portfolio?
please use excel for your answer.
You have been managing a $5 million portfolio that has a beta of 1.15 and a...
You have been managing a $5 million portfolio that has a beta of
1.15 and a required rate of return of 11.625%. The current
risk-free rate is 3%. Assume that you receive another $500,000. If
you invest the money in a stock with a beta of 0.85, what will be
the required return on your $5.5 million portfolio? Do not round
intermediate calculations. Round your answer to two decimal
places.
A company has 14 million shares of common stock outstanding with a beta of 1.15 and...
A
company has 14 million shares of common stock outstanding with a
beta of 1.15 and a market price of $45 a share. There are 1000000
shares of 9 percent preferred stock outstanding valued at $80 a
share. The 10 percent semi annual coupon bonds have a face value of
$1000 and are selling at 92 percent of par. There are 280,000 bonds
outstanding that mature in 15 years. The market risk premium is 12
percent., T-bills are yielding 4.5...
A company has 14 million shares of common stock outstanding with a beta of 1.15 and...
A company has 14 million shares of common stock outstanding with
a beta of 1.15 and a market price of $45 a share. There are
1,000,000 shares of 9 percent preferred stock outstanding valued at
$80 a share. The 10 percent semiannual coupon bonds have a face
value of $1,000 and are selling at 92 percent of par. There are
280,000 bonds outstanding that mature in 15 years. The market risk
premium is 12 percent, T-bills are yielding 4.5 percent,...
Suppose you are the manager of a mutual fund and hold a RM10 million stock portfolio....
Suppose you are the manager of a mutual fund and hold a RM10
million stock portfolio. The
required market risk premium is 6.5% and the risk fee rate is 3%.
Stock A & B are 20% each
of its total portfolio, Stock C and D are 25% and 18% and the
remainder goes to Stock E.
Beta for Stock A, B, C, D and E are 0.75, 1.30, 1.6, 0.5 and 1.2.
The return for stock A and B
are...
A company has a $36 million stock portfolio with a beta of 2. The portfolio is...
A company has a $36 million stock portfolio with a beta of 2.
The portfolio is very highly correlated with the S&P 500 index.
The futures price for a contract written on the S&P 500 index
is 2500. One futures contract is for delivery of 50 times the index
value. What futures trade is necessary to reduce the beta of the
combined stock portfolio and futures position to 0.9?
A company has a $36 million stock portfolio with a beta of 1.2. The portfolio is...
A company has a $36 million stock portfolio with a beta of 1.2.
The portfolio is very highly correlated with the S&P 500 index.
The futures price for a contract written on the S&P 500 index
is 2500. one futures contract is for delivery of 50 times the index
value. What futures trade is necessary to reduce the beta of the
combined stock portfolio and futures position to 0.9?
Assume that you hold a. diversified 90,000 portfolio with a beta of 1.20 and that you...
Assume that you hold a. diversified 90,000 portfolio with a beta
of 1.20 and that you are in the process of buying 1000 shares of a
high tech stock at $10 a share with beta of 1.70 and adding it to
this portfolio. also assume that risk free rate is 2% and that the
expected rate of return on the market is 10.0% based of the CAPM
what would be the expected rate of return. for your portfolio after
the...
What is the Beta of a three-stock portfolio including 25% of Stock A with a Beta of .90, 40% Stock B with a Beta of 1.25
What is the Beta of a three-stock portfolio including 25% of
Stock A with a Beta of .90, 40% Stock B with a Beta of 1.25, and
35% Stock C with a Beta of 1.3?1.051.251.181.22
A portfolio manager is holding the following investments: Stock Amount Invested Beta X $10 million 1.4...
A portfolio manager is holding the following investments:
Stock
Amount Invested
Beta
X
$10 million
1.4
Y
20 million
1.0
Z
40 million
0.8
The manager plans to sell his holdings of Stock Y. The money from
the sale will be used to purchase another $15 million of Stock X
and another $5 million of Stock Z. The risk-free rate is 5% and the
market risk premium is 5.5%. How many percentage points higher will
the required return on the...
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