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    2nd Exam Quiz 2

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    Jazel Mae Celerinos
    The document contains instructions and problems for a finance quiz. Problem 1 asks to calculate the portfolio beta coefficient and required rate of return for a portfolio with different stock investments. Problem 2 asks to calculate the expected value, standard deviation, and coefficient of variation for a portfolio invested in three companies. Problem 3 asks to calculate the market value and weighted average cost of capital for a company given information about its earnings, interest costs, and capitalization rates.

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    2nd Exam Quiz 2

    Uploaded by

    Jazel Mae Celerinos
    59 views1 page
    The document contains instructions and problems for a finance quiz. Problem 1 asks to calculate the portfolio beta coefficient and required rate of return for a portfolio with different stock investments. Problem 2 asks to calculate the expected value, standard deviation, and coefficient of variation for a portfolio invested in three companies. Problem 3 asks to calculate the market value and weighted average cost of capital for a company given information about its earnings, interest costs, and capitalization rates.

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    The document contains instructions and problems for a finance quiz. Problem 1 asks to calculate the portfolio beta coefficient and required rate of return for a portfolio with different stock investments. Problem 2 asks to calculate the expected value, standard deviation, and coefficient of variation for a portfolio invested in three companies. Problem 3 asks to calculate the market value and weighted average cost of capital for a company given information about its earnings, interest costs, and capitalization rates.

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    59 views1 page

    2nd Exam Quiz 2

    Uploaded by

    Jazel Mae Celerinos
    The document contains instructions and problems for a finance quiz. Problem 1 asks to calculate the portfolio beta coefficient and required rate of return for a portfolio with different stock investments. Problem 2 asks to calculate the expected value, standard deviation, and coefficient of variation for a portfolio invested in three companies. Problem 3 asks to calculate the market value and weighted average cost of capital for a company given information about its earnings, interest costs, and capitalization rates.

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    Department of Accounting Education

    FIN 33 – Quiz
    February 21, 2017

    GENERAL INSTRUCTION: Always show your solution on each question. No Solution,


    No Point policy must be observed.

    Problem 1

    Risk-free rate 4.8%


    Market rate of return 12%
    Beta:
    Stock X 0.8
    Stock Y 1.6
    Stock Z 2.5
    Required:
    1. Compute for the portfolio beta coefficient assuming the investment proportion of
    Stock X, Y and Z are 30%, 40% and 30% respectively.
    2. Calculate the required rate of return of the portfolio using CAPM.

    Problem 2

    State of Probability of Rate of Return if State occurs


    Economy Sate of Otwol PSY Co. Forevermore,
    Economy Corp. Inc.
    Boom 60% 18% 22% 24%
    Recession 40% 4% 4% 6%

    Required:
    1. What would be the expected value on a portfolio if 35% of the portfolio is
    invested in PSY Co., 50% in Forevermore, Inc., and the remaining is in OTWOL
    Corp.?
    2. Compute for the standard deviation on this portfolio.
    3. Compute the Coefficient of Variation.

    Problem 3

    Yuri Company has expected earnings before interest and taxes (EBIT) of P800,000 and
    interest costs of P80,000. The firm’s equity and debt capitalization rates are 12 percent
    and 8 percent, respectively. Assume no corporate income taxes.
    1. What is the market value of the firm?
    2. What is the weighted average cost of capital?

    God Bless!!
    Ma’am Jazel

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