Using Yahoo! Finance find the value of beta for your reference company (Apple, INC.)

a. What is the estimated beta coefficient of your company? What does this beta mean in terms of your choice to include this company in your overall portfolio?

b. Given the beta of your company, the present yield to maturity on U.S. government bonds maturing in one year (currently about 4.5% annually) and an assessment that the market risk premium (that is - the difference between the expected rate of return on the 'market portfolio' and the risk-free rate of interest) is 6.5%, use the CAPM equation in order to find out what is the present 'cost of equity' of your company? Explain what is the meaning of the 'cost of equity'.

c. Choose two other companies, look up their "Beta" and report the names of these companies and their betas. Suppose you invest one third of your money in each of the stocks of these companies. What will the beta of the portfolio be? Given the data in (b), what will the Expected Rate of Return on this portfolio be? Do you feel that the three-stock portfolio is sufficiently diversified or does it still have risk that can be diversified away? Explain.

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Using Yahoo! Finance find the value of beta for your reference company (Apple, INC.)

a. What is the estimated beta coefficient of your company? What does this beta mean in terms of your choice to include this company in your overall portfolio?

Estimated Beta of Apple is 1.45. This Beta indicates that the correlation between the change in the price of Apple and the change in market price is positive and moderate. This means that the Apple's market risk is high.

b. Given the beta of your company, the present yield to maturity on U.S. government bonds maturing in one year (currently about 4.5% annually) and an assessment that the market risk premium (that is - the ...

Breifly describe the capitalassetpricingmodel (CAPM), its practical use, and its limitations.
Does not have to be long and drawn out, just understandable.

The CapitalAssetPricingModel (CAPM) is a widely used concept in finance. The model is expressed graphically by the Security Market Line (SML). Within the context of investment, explain how CAPM can be useful to investors.

Suppose you have invested $50,000 in the following four stocks:
Security Amount Invested Beta
Stock A $10,000 0.7
Stock B 15,000 1.2
Stock C 12,000 1.4
Stock D 13,000 1.9
The risk-free rate is 5 percent and the expected return on the market portfolio is 18 percent.

The Treasury bill rate is 4 percent and the expected return on the market portfolio is 12 percent. Using the capitalassetpricingmodel: What is the required return on an investment with a beta of 1.5?

You have been provided the following data on the securities of three firms, the market portfolio, and the risk-free asset:
Security Expected Return Standard Deviation Correlation Beta
Firm A 0.13 0.12 ? 0.9
Firm B 0.16 ? 0.4 1.1
Firm C 0.25 0.24 0.75 ?
The market portfolio (S&P5

Tony is wondering how much risk he must accept in order to generate a reasonable return on his portfolio. The risk-free return currently is 5 percent. The return on the market portfolio is 16 percent. Use the CapitalAssetPricingModel to calculate the beta coefficient associated with each of the following portfolio returns.

I need 100 word original notes in answering the following questions:
1. What is operating leverage and how does it influence a project?
2. What are the two methods for estimating debit cost of capital, and what do you do when there is default risk? Explain the circumstances in which you would use each method.
3. In what

Consider the following information:
Stock A Stock B T-bills
Beta 0.6 1.2 0.0
Expected return, % 5.0 8.0 2.0
(a) Assuming that all stocks are priced correctly according to the CAPM, compute the expected return on the market portfolio.
(c) Is it possible for

Suppose the risk free rate is 4%. Suppose also that the expected return required by the market for a portfolio with a beta of 1.0 is 9%. Suppose you consider buying a share of stock at a price of $42. The stock is expected to pay a dividend of $3 next year and to sell then for $41. The stock risk has been evaluates at beta of