I am considering two investment choices that are mutually exclusive. (This means I must pick one of them OR neither of them; I cannot pick both.)
The first opportunity requires an investment of $50 today and will return $10 annually forever.
The second opportunity requires $300 of investment today and will return $30 annually forever.
What should I do if my cost of capital is 10%?
What should I do if my cost of capital is 5%?
Given a risk-free rate of 2% and a market return of 8%, what is the beta of a portfolio constructed of these two securities?
30% stock 1, with expected return of 8%
70% stock 2, with expected return of 10%
If the inflation rate doubles, what is the new beta of the portfolio in the previous question?