6 Eagle Ltd has an expected return of 8% and a historical risk of 5%, as compare

Question

6 Eagle Ltd has an expected return of 8% and a historical risk of 5%, as compared with the market's expected return of 18% and historical risk of 9%. The correlation of Eagle Ltd's return with the market return is 0.6. Calculate the beta of Eagle Ltd.

Answer:

7 One year ago you acquired 1,000 shares in Investa Ltd at a price of $12.80 per share. During the past year, you have received two dividend payments for $0.20 and $0.25 per share, respectively. Investa Ltd is currently trading at $15.00. If you sold your shares at the current price, what would be your holding period return?

Answer: Number

Explanation / Answer

Answer:6 Beta=Standard deviation of security*r/Standard deviation of market

=0.05*0.6/0.09

=0.333

Answer:7

Holding Period Return =Income + (End of Period Value – Initial Value) / Initial Value

=$0.20+$0.25+(15-12.80)/12.80

=20.70%

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