Answer Happy

Beta 14. Tom Noel holds the following portfolio: Investment 1.40 Stock 150000 0.80 A 50000 1.0 B 200000 1.2 С 100000 D 500000 Total Tom plans to sell Stock C and replace it with Stock E, which has a beta of 1.5. By how much will the portfolio beta change? Do not round your intermediate calculations. a. +0.60 b. - 0.20 c. + 0,20 d. +0.28 e. - 0.28 15. Determine the periodic coupon payment for the following three bonds: A 15-year 4 percent coupon corporate bond. A 20-year 4.75 percent coupon Treasury note, and a 25-year Opercent coupon corporate bond. Assume that the bonds pay coupon quarterly and have a $2,000 par value. A. $80, 595. SO, respectively B. $20.00, $23.75, 50, respectively c. $20.00, 523.75, $2,000, respectively D. $40.00, S47.50. SO, respectively E. $40.00, 547.50, $2,000, respectively 16. A 10-year semiannual bond has a coupon of 10%. The coupon rate will remain fixed until the bond matures. The bond has a yield to maturity of 9%. Which of the following statements is CORRECT? a. If market interest rates decline, the price of the bond will also decline. b. The bond is currently selling at a price below its par value. c. If market interest rates remain unchanged the bond's price one year from now will be lower than it is today d. The bond should currently be selling at its par value. c. If market interest rates remain unchanged the bond's price one year from now will be higher than it is today.