BUSN 5200 Final Exam – Take-Home Portion

Based on Cornett, Adair, and Nofsinger, 3e, chs. 7-10.

Name __________________________

Calculations (10 points each)

19. Here is a list of some large-cap US stocks and their betas as of Dec. 8, 2017. Suppose you have a portfolio consisting of 30% BRKB, 20% DIS, 20% AAPL, 15% CVX, and 15% HAL. What is the beta for the overall portfolio? (Hint: See p. 250)

Company

Long-term average beta

Apple (AAPL)

1.11

Berkshire Hathaway Cl B (BRKB)

0.8

Chevron (CVX)

1.16

Disney (DIS)

1.03

Halliburton Co. (HAL)

1.47

20. FedEx stock ended Year 1 at $103.39 per share. It paid a $0.35 per share dividend in Year 2 at $106.69. If you owned 200 shares of FedEx, what was your dollar return and percent return?

21. For the year to date, suppose Norfolk Southern earned a –1.34% return, Raytheon earned a 7.96% return, and Pepsico earned 0.88%. If you have a portfolio made up of 30% Norfolk Southern, 25% Raytheon, and 45% McDonald’s, what is your portfolio return?

22. Determine the interest payment for the following three bonds: 3½% coupon corporate bond (paid semiannually), 4.25% coupon Treasury note, and a corporate zero coupon bond maturing in ten years. (Assume a $1,000 par value.)