finance questions-
Consider the following information:
|
|
Rate of Return If State Occurs |
| State of |
Probability of |
|
| Economy |
State of Economy |
Stock A |
Stock B |
|
|
|
|
| Recession |
.35 |
.07 |
-.17 |
| Normal |
.40 |
.09 |
.16 |
| Boom |
.25 |
.13 |
.36 |
|
| a. |
Calculate the expected return for the two stocks.(Round your answers to 2 decimal places. Omit the “%” sign in your response.) |
| Expected Return for A |
% |
| Expected Return for B |
% |
| b. |
Calculate the standard deviation for the two stocks. (Round your answers to 2 decimal places. Omit the “%” sign in your response.) |
| Standard deviation for A |
% |
| Standard deviation for B |
% |
Need help figuring out standard deviation
7.
value:
3.00 points
Problem 11-9
Consider the following information:
|
|
Rate of Return If State Occurs |
| State of |
Probability of |
|
| Economy |
State of Economy |
Stock A |
Stock B |
Stock C |
|
|
|
|
|
| Boom |
.25 |
.18 |
.32 |
.41 |
| Good |
.20 |
.12 |
.15 |
.15 |
| Poor |
.40 |
.05 |
-.08 |
-.06 |
| Bust |
.15 |
-.01 |
-.16 |
-.09 |
|
| a. |
Your portfolio is invested 25 percent each in A and C, and 50 percent in B. What is the expected return of the portfolio?(Round your answer to 2 decimal places. Omit the “%” sign in your response.) |
| b-1. |
What is the variance of this portfolio?(Round your answer to 5 decimal places.) |
| Variance of this portfolio |
|
| b-2. |
The standard deviation?(Round your answer to 2 decimal places. Omit the “%” sign in your response.) |
**Need help figuring out standard deviation.
8.
value:
4.00 points
Problem 11-10
| Fill in the missing information in the following table. Assume that Portfolio AB is 60 percent invested in Stock A.(Round your answer to 2 decimal places. Negative amounts should be indicated by a minus sign. Omit the “%” sign in your response.) |
| Annual Returns on Stocks A and B |
| Year |
Stock A |
Stock B |
Portfolio AB |
|
|
|
|
| 2006 |
14 |
% |
24 |
% |
|
% |
| 2007 |
35.8 |
% |
-36.2 |
% |
|
% |
| 2008 |
-18.6 |
% |
46.2 |
% |
|
% |
| 2009 |
25.4 |
% |
16.6 |
% |
|
% |
| 2010 |
14.2 |
% |
25.8 |
% |
|
% |
| Avg return |
|
% |
|
% |
|
% |
| Std deviation |
|
% |
|
% |
|
% |
|
Only was able to figure out average return.
11.
value:
1.00 points
Problem 12-2
| A stock has an expected return of 11.2 percent, its beta is .50, and the risk-free rate is 4 percent. What must the expected return on the market be?(Round your answer to 2 decimal places. Omit the “%” sign in your response.) |
Don’t know how to figure out expected return. Please show all steps. I need to know how to figure out for the test.
Problem 12-3
| A stock has an expected return of 15.9 percent, a beta of 1.70, and the expected return on the market is 11.2 percent. What must the risk-free rate be?(Round your answer to 2 decimal places. Omit the “%” sign in your response.) |
Problem 12-10
| A stock has a beta of 1.2 and an expected return of 8 percent. A risk-free asset currently earns 3 percent. |
| a. |
What is the expected return on a portfolio that is equally invested in the two assets?(Round your answer to 2 decimal places. Omit the “%” sign in your response.) |
| b. |
If a portfolio of the two assets has a beta of 1.0, what are the portfolio weights?(Round your answers to 2 decimal places. Omit the “%” sign in your response.) |
| c. |
If a portfolio of the two assets has an expected return of 6 percent, what is its beta?(Round your answer to 2 decimal places.) |
| d. |
If a portfolio of the two assets has a beta of 2.40, what are the portfolio weights?(Negative amounts should be indicated by a minus sign. Omit the “%” sign in your response.) |
20.
value:
1.00 points
Problem 12-13
| Stock Y has a beta of 1.5 and an expected return of 15.5 percent. Stock Z has a beta of 0.4 and an expected return of 7 percent. What would the risk-free rate have to be for the two stocks to be correctly priced relative to each other?(Round your answer to 2 decimal places. Omit the “%” sign in your response.) |
21.
value:
2.00 points
Problem 12-15
| Suppose you observe the following situation: |
| Security |
Beta |
Expected Return |
| Peat Co. |
1.20 |
14.6 |
| Re-Peat Co. |
.60 |
10.3 |
|
| Assume these securities are correctly priced. Based on the CAPM, what is the expected return on the market? What is the risk-free rate?(Round your answer to 2 decimal places. Omit the “%” sign in your response.) |
|
|
| Expected return |
% |
| Risk-free rate |
% |
Order This Paper Now
