Mary is going to receive a 39-year annuity of $9,400. Nancy is going to receive a perpetuity of $9,400. If the appropriate interest rate is 12 percent, how much more is Nancy’s cash flow worth?
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Ответ:
Beta= 0.9845
Explanation:
Giving the following information:
Stock A:
Investment= $65,000
Beta= 0.75
Stock B:
Investment= $35,000
Beta= 1.42
To calculate the beta of the portfolio, we need to use the following formula:
Beta= (proportion of investment A*beta A) + (proportion of investment B*beta B)
Beta= (0.65*0.75) + (0.35*1.42)
Beta= 0.9845