Stocks D and T each have an expected return of 12.5%, a beta…

Stocks D and T each have an expected return of 12.5%, a beta of 1.0, and a standard deviation of 35%.  The risk-free rate of return (rRF) is 5.5%.  Assume that the market is in equilibrium.  The returns on the two stocks have a correlation of 0.75.  Portfolio P has 35% in Stock D and 65% in Stock T.  Which of the following statements is CORRECT?  

Favorite Chocolates & Sweets (FCS) manufactures and distribu…

Favorite Chocolates & Sweets (FCS) manufactures and distributes fine chocolates and candies.  FCS is considering the development of a new line of sugar-free truffles.  FCS’s CFO has collected the following information regarding the proposed project, which is expected to last 3 years: What is the proposed project’s NPV?

You have $8,000,000 in a portfolio consisting of 10 stocks w…

You have $8,000,000 in a portfolio consisting of 10 stocks with $800,000 invested in each.  The portfolio’s beta is 1.50.  You plan to sell Stock A in your portfolio and use the proceeds to buy Stock B.  Stock A has a beta of 1.25, while Stock B’s beta is 0.50.  After this transaction, what will be the portfolio’s new beta? (Hint:  Make sure to carry out your calculation to 4 decimal places.)