You have a 25-year maturity, 10.8% coupon, 10.8% yield bond…
You have a 25-year maturity, 10.8% coupon, 10.8% yield bond with a duration of 10 years and a convexity of 136.3. If the interest rate were to fall 133 basis points, your predicted new price for the bond (including convexity) is __________. (Select the closest answer.)
Read DetailsJ. M. Keyes put all his money in one stock, and the stock do…
J. M. Keyes put all his money in one stock, and the stock doubled in value in a matter of months. He did this three times in a row with three different stocks. J. M. got his picture on the front page of the Wall Street Journal. However, the paper never mentioned the thousands of investors who made similar bets on other stocks and lost most of their money. This is an example of the __________ problem in deciding how efficient the markets are.
Read DetailsYou have a $44,000 portfolio consisting of Intel, GE, and Co…
You have a $44,000 portfolio consisting of Intel, GE, and Con Edison. You put $21,600 in Intel, $9,600 in GE, and the rest in Con Edison. Intel, GE, and Con Edison have betas of 1.3, 1, and 0.8, respectively. What is your portfolio beta?
Read DetailsYou consider buying a share of stock at a price of $14. The…
You consider buying a share of stock at a price of $14. The stock is expected to pay a dividend of $1.34 next year, and your advisory service tells you that you can expect to sell the stock in 1 year for $17. The stock’s beta is 1.8, rf is 11%, and E[rm] = 21%. What is the stock’s abnormal return?
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