*** NOTE: No copying answers from other questions in this system are incorrect.

Question

*** NOTE: No copying answers from other questions in this system are incorrect. IT IS VERY IMPORTANT TO COMPLETE THE ENTIRE EXERCISE. INCLUDE ALL CALCULATIONS. THANK

Problem 1:

The company Zarabel International is a financial instrument where the risk-free return

market is 7.25% and has a beta of 1.25. Determines instrument performance financial. (5 points)

Problem 2:

Determines the beta associated with a financial instrument whose return is 9.25%, if you have a

risk-free yield of 5.5% and a yield of 13.55% of the market.

Problem 3:

Evaluate the following cases of assets:

1-What would happen to the performance of each asset if it reflects a 20% increase in performance

From the market?

2. What would happen to the performance of each asset if it reflects a 20% decrease in market performance?

3. If the market performance increased in the future, how active you prefer? Why?

4. If the market yield decrease in the future, how active you prefer? Why?

*** NOTE: No copying answers from other questions in this system are incorrect. IT IS VERY IMPORTANT TO COMPLETE THE ENTIRE EXERCISE. INCLUDE ALL CALCULATIONS. THANK

Explanation / Answer

Problem 2:

Expected return = Rf+×Rp

Rf is risk free return

Rp is risk premium

9.25% = 5.5%+×(13.55%-5.5%)

Beta () = 0.47

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