Quiz 13 Bogdan Maksimov

State of Economy Return on Stock A Return on Stock B Bear .073-094 Normal .134.142 Bull .062.321 Assume each state of the economy is equally likely to happen. a. Calculate the expected return of each stock. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the standard deviation of each stock. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g 32.16.) c. What is the covariance between the returns of the two stocks? (A negative answer should be indicated by a minus sign, Do not round intermediate calculations and round your answer to 6 decimal places, e.g., .161616.) d. What is the correlation between the returns of the two stocks? (A negative answer should be indicated by a minus sign, Do not round intermediate calculations and round your answer to 4 decimal places, e.g., .1616.)

5 Construct payoff tables or payoff diagrams on expiration to show what position in IBM puts, calls and/or underlying stock best expresses the investor's objectives described below. Assume IBM currently sells for $100. Make appropriate assumptions about the strike prices of options in each case. Ignore the cost of options.   a/ An investor wants the position to be at least worth $75. Further the investor believes that the IBM stock price will go up but will at most reach $140.

On a particular​ date, FedEx has a stock price of $88.24 and an EPS of $7.36. Its​ competitor, UPS, had an EPS of $0.30. What would be the expected price of UPS stock on this​ date, if estimated using the method of​ comparables?       Question content area bottom Part 1   A.$5.40 B. $7.19 C.$8.00 D.$3.60

NO2.6

3 You are given the following information on some company's stock, as well as the risk- free asset. Use it to calculate the price of the call option written on that stock, as well as the price of the put option. (HINT: You should use the Black-Scholes formula!) (Do not round intermediate calculations and round your final answers to 2 decimal places, e.g., 32.16.) Today's stock - $77 price = Exercise price = $75 Risk-free rate = Option maturity = 5 months Standard deviation of annual stock returns Call price Put price $ $ 3.4% per year, compounded continuously = 59% per year 3.61 x 0.56 X 1

#28 The market price of a share of preferred stock is $20.62 and the dividend is $2.56. What discount rate did the market use to value the stock? Submit Answer format: Percentage Round to: 2 decimal places (Example: 9.24%, % sign required. Will accept decimal format rounded to 4 decimal places (ex: 0.0924)) unanswered not_submitted Attempts Remaining: Infinity

Question one Suppose you have the following information from Muscat stock market     Stock Share outstanding Base day Closing price Second day closing price Salalah company 18 3 2.8 Dhofar power company 26 2.8 3.1 Oman company 10 4.1 2.1 Dhofar bank 28 3 1.8 Calculate 1. Price weighted index 2. Value weighted index   plz use the formula shows in the pictures

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Part a only

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Ningbo Industrial Concepts Incorporated             Initial stock price $115.00             Exercise price $115.00             Call price $4.75             Put Price $4.50                             Required:               Using the information in the table above, please calculate dollar value of the following option strategies. Use this calculated dollar value to determine the profit of each strategy at various stock prices.                 (Use cells A3 to B6 from the given information to complete this question. Negative answer should be input and displayed as a negative value. All other answers should be input and displayed as positive values.)                   Ningbo Industrial Concepts Incorporated Dollar Value of Strategy as a Function of Current Stock Price     Strategy $95.00 $105.00 $115.00 $125.00 $135.00     Straddle               Strip               Strap                               Ningbo Industrial Concepts Incorporated Rate of Return…

The return of stock B is __% The volatility of stock A is __% The volatility of stock B is __%

use attachment to answer question q2- This question relates to Diagram 2 from the 9.4 diagrams, which shows the Security Market Line. A share has a beta of 0.5 and, based on it's current price, has an expected return of 5%.  Based on the CAPM, is the share overpriced, underpriced or correctly priced?   Select one: a. Unable to determine without more information. b. Correctly priced c. Overpriced d. Underpriced

品 Check my work Consider the following information: Probability of Rate of Return if State Occurs State of Economy Economy Stock A Stock B .050 130 .220 -33 .23 oped Recession .23 Normal .63 Boom .14 .46 Book Hint a. Calculate the expected return for the two stocks. (Do not round interme calculations and enter your answers as a percent rounded to 2 decimal places 32.16.) b. Calculate the standard deviation for the two stocks. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places 32.16.) Print a. Expected return of A Expected return of B b. Standard deviation of A Standard deviation of B Graw **. **** APR 08 F3 F1 F2

If Stock Z is correctly priced, you can infer that the expected market return is ____%. Do not round any intermediate work, but round your final answer to 2 decimal places (example: enter 12.34 for 12.34%).  Do not enter the % sign. Margin of error for correct responses: +/- .05               expected return (implied by market price)      Beta     Stock Z 12% 1.48     T-bonds 5%

Hors d'Age Cheeseworks has been paying a regular cash dividend of $5.04 per share each year for over a decade. The company is paying out all its earnings as dividends and is not expected to grow. There are 115,000 shares outstanding selling for $84 per share. The company has sufficient cash on hand to pay the next annual dividend. Suppose that, starting in year 1, Hors d'Age decides to cut its cash dividend to zero and announces that it will repurchase shares instead. a. What is the immediate stock price reaction? Ignore taxes, and assume that the repurchase program conveys no information about operating profitability or business risk. 8 Answer is complete but not entirely correct. Immediate stock price reaction decrease b. How many shares will Hors d'Age re-purchase? (Round your answer to the nearest whole number.) 8 Answer is complete but not entirely correct. Number of shares repurchased 6,900

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NO2.6 A small market consists of three stocks, A, B, and C. and their financial data and projection are presented below. Assume CAPM holds. Please see the attached picture.

Part A: True or False (20%) Please conclude weather the following statement are true or false and give me your reasons (You can explain by using knowledges learned from the class or textbooks or any other empirical facts in the financial market. Don't use your personal examples which is not representative enough.). 1. The true Market Portfolio is represented by the Standard & Poor's 500 Stock Index so it is perfectly correlated with the Standard & Poor's 500 Stock Index. 2 Since we know CAPM does not hold in the real financial market, it is useless to investors. 3. Investors usually prefer purchasing in-the-money options since in-the-money options are much cheaper than out-of-money options. 4. In a bankruptcy, bond investors have priority over shareholders in claims on the company's asset so bond holders are less vulnerable. However, buying corporate bonds is not a kind of riskless investment.

help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all working