Foundation of Financial Management 8

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 Week 5, Day 6, 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.

Show more

Calculate Your Essay Price
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more