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*****FOR LINDA********** Hi linda, Assignment 2: The

Resolved Question:

*****FOR LINDA**********
Hi linda,

Assignment 2: The CAPM and Final Project 4: Report and Presentation
Part One: The CAPM
Olter, Inc. is starting its risk management program for the company and has asked for your help in determining critical risk measurements for the firm. The company has identified several factors in the market that they believe are critical for your tasks:
• The risk-free rate is 6%
• The required return on the average stock is 13%
• Olter’s average return is 13%
Required:
1. What is Olter’s beta coefficient?
2. How does the beta coefficient influence the firm’s stock value?
3. What is the required rate of return for Olter?
4. In terms of risk, how does Olter compare to the average firm in the market?
5. If Olter’s beta increased to 1.6, what would you expect to happen to the required rate of return and what does this mean for the firm?
Deliverable:
By Saturday, April 6, 2013, submit the completed assignment to the W5: Assignment 2 Dropbox. Use a Microsoft Excel spreadsheet that illustrates your calculations. You may use the formulas embedded in Microsoft Excel and/or a financial calculator for these calculations.
Name your document SU_FIN2030_W5_A2_part1_LastName_FirstInitial.
Part Two: Final Project 4: Portfolio Return and Risk; Report and Presentation
Part A: Portfolio Return and Risk
Required:
Select four stocks from finance.yahoo.com, google.finance.com, or moneycentral.msn.com. One should be a clothing manufacturer, one should be a retailer, one should be an automobile manufacturer, and one should be a restaurant or food producer.
1. Obtain the closing price, the change in price from the previous day, and the beta.
2. Calculate the return on holding the stock for a day (this should be the change in price over the closing price without the change).
3. Calculate a portfolio return with weights of 0.25 for each stock.
4. Calculate a weighted beta with weights of 0.25 for each stock.
5. Summarize the implications of the portfolio return and risk with respect to what you learned about beta and the CAPM.
Submitted: 1 year ago.
Category: Homework
Expert:  Linda_us replied 1 year ago.
Thanks for requesting me. I will post the solution before your deadline.
Expert:  Linda_us replied 1 year ago.
Just to update you I would post the solution tomorrow based on current data.
Customer: replied 1 year ago.


Thanks Linda

Expert:  Linda_us replied 1 year ago.
Thank you.
Expert:  Linda_us replied 1 year ago.
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Linda_us, Finance, Accounts & Homework Tutor
Category: Homework
Satisfied Customers: 7105
Experience: Post Graduate Diploma in Management (MBA)
Linda_us and 12 other Homework Specialists are ready to help you
Customer: replied 1 year ago.

Thanks and okay to remove. I truly appreciate all your help, in the last three weeks.


 

Expert:  Linda_us replied 1 year ago.
You are welcome.

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