Finance: Perfect Competition and the Supply Curve & Monopoly
Problems: 8.2, 8.3, 8.4, 8.5, and 8.12
10.1, 10.2, 10.3, 10.4, and 10.12
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8.1
xx (0.1)(-50%) + xxxxxxxxxx + xxxxxxxxxx + (0.2)(25%) + (0.1)(60%)
= 11.40%.
xx = (-50% – xxxxxxxxxxxxx + (-5% – xxxxxxxxxxxxx x (16% – xxxxxxxxxxxxxx
+ xxxx – xxxxxxxxxxxxx + (60% – xxxxxxxxxxxxxx
xx = 7.12%; x = xxxxxxxx
CV = 26.69/11.4 x xxxx
8.2
Total portfolio value = xxxxxxxxxxxxxxx $75,000��Weighted average xxxx of first stock: xxxxxx / 75,000 x 0.8 x 0.37�+Weighted xxxxxxx beta xx second stock: 40,000 / 75,000 x 1.4 x xxxxxxxx xxxx portfolio beta��
xxx
xxx rRF x xxx – xxxxxx
xx xx x (13% – xxxxxx
xx 10.9%.
8.4
x =? ; xxx = xxx xxx = xx b x xxxxx
Return on Market
Expected xxxxxx for market = xxxxxxxx xx x + mkt premium of x = 11%
xxxxxx on Stock
r = rRF + xxx – rRF)b
xxxxx 5% x 6%(1.2)
xxr = xxxxxx
xxxxxxx
r xxxxx xxx = xxx
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