1. Consider the following annual returns for Vanguard 500 Index Fund Investor Shares (VFINX) 2005 2006 2007 2008 10% -10
Posted: Wed May 18, 2022 11:49 pm
1. Consider the following annual returns for Vanguard 500
Index Fund Investor Shares (VFINX)
2005
2006
2007
2008
10%
-10%
15%
-15%
Calculate the arithmetic average annual return over this
period.
2. The Sisyphean Company is considering a new project that
will have an annual depreciation expense of $6 million. If
Sisyphean's marginal corporate tax rate is 35%, then what is the
value of the depreciation tax shield on the company's new
project?
3. A portfolio comprises Delta Air Lines (beta of 1.6) and
Amazon (beta of 0.6). You invested 65% of your funds in Delta Air
Lines and 35% of your funds in Amazon . What is the beta of the
portfolio?
Index Fund Investor Shares (VFINX)
2005
2006
2007
2008
10%
-10%
15%
-15%
Calculate the arithmetic average annual return over this
period.
2. The Sisyphean Company is considering a new project that
will have an annual depreciation expense of $6 million. If
Sisyphean's marginal corporate tax rate is 35%, then what is the
value of the depreciation tax shield on the company's new
project?
3. A portfolio comprises Delta Air Lines (beta of 1.6) and
Amazon (beta of 0.6). You invested 65% of your funds in Delta Air
Lines and 35% of your funds in Amazon . What is the beta of the
portfolio?