assignment 2

what are the axcess rates?

4. Suppose that we can describe the world using two states and that two assets are available, asset K and asset L. We assume the assets' future prices have the following distributions:

Based on the data from the table to do a relative valuation, which company is the most attractive to buy and which company would be the most likely sell? Buy C and Sell A ●Buy C and Sell B Buy A and Sell C Buy A and Sell B Company A B C D Estimated P/E Ratio 20 30 40 25 Estimated Annual EPS 5 3 3 4 Current Price $80 $80 $150 $100 Percent overvalued or undervalued?

options are forward sale, forward purchase, put option, or call option

Hi Anusha D 1/20 >> 5% From the following data calculate the information ratio: Risk free rate: 6% Beta:1.3 Market rate: 11.60% Actual return: 14.5% Tracking error: 9.30% 0.1211 0.1921 0.1721 0.1312 Continue

The effective convexity of with a high price of $100.73, a low price of $99.24, and a current price of $99.88 given a 600bps change in yield curve is closest to A. -555 B. -198 C. -33 D. Not enough information

YearRisk-free ReturnMarket ReturnWyatt Oil ReturnBeta20071.9%6.0%5.5%0.83320082.1%-38.5%-32.6%0.85320091.7%22.5%19.6%0.865   Using the average historical excess returns for both Wyatt Oil and the Market portfolio, your estimate of Wyatt Oil's beta is closest to (%) (2 decimal places):

Exhibit 7.1USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM   Rates of Return Year RA Computer Market Index 1   13 17 2     9 15 3 –11   6 4   10   8 5   11 10 6     6 12 Refer to Exhibit 7.1. The equation of the characteristic line for RA is   a. RRA = –7.98 + 1.1023RMI.     b. RRA = –9.41 + 1.3893RMI.     c. RRA = –4.92 – 0.7715RMI.     d. RRA = 11.63 + 1.2195RMI.     e. RRA = 4.92 + 0.7715RMI.

Not used ai financial accounting question

v. 2

P Flag question Dhofar Energy Services has a Beta = 1.97 The risk-free rate on a treasury bill is currently 4.4% and the cost of equity has 20.70%. What is the market return? Select one: Oa 0.1267 Ob. 1.0827 Oc. All the given choices are not correct Od. 0.2497 Oe 0.1476

Basic Option Strategies Profit Computation Assume the below prices for calls and puts: Call Put Strike Jul Aug Oct Jul Aug Oct 165 2.7 5.25 8.1 2.4 4.75 6.75 170 0.8 3.25 6 5.75 7.5 1. Buy one August 170 call contract. Hold it until expiration. lIdentify the breakeven stock price at expiration. What is the profit/loss if ST=190? What is the maximum profit? 2. Buy one October 165 put contract. Hold it until the options expire. Identify the breakeven stock price at expiration. What is the Maximum possible loss from the transaction? What is the profit/loss if ST=185

use attachment to answer questions This question relates to Diagram 1 from the  9.4 diagrams, which shows the Security Market Line. What is the expected return on the market?   Select one: a. 20% b. 10% c. 15% d. 5%

Up (percentage of price change) Down (percentage of price change) Initial stock price, S_0 interest rate Exercise price Time to maturity-years (T) up(u) down(d) R Risk Neutral Probabilities Qu Qd Put option payoffs Put Price Price??? 40% -20% N8 25 8% 30 1 get formula

Basic Option Strategies Profit Computation Assume the below prices for calls and puts:   Call Call Call Put Put Put Strike Jul Aug Oct Jul Aug Oct 165 2.7 5.25 8.1 2.4 4.75 6.75 170 0.8 3.25 6 5.75 7.5 9   Buy one August 170 put contract. Hold it until expiration. Identify the breakeven stock price at expiration. What is the profit/loss if ST=190? Buy one October 165 call contract. Hold it until the options expire. Identify the breakeven stock price at expiration. What is the Maximum possible loss from the transaction? What is the profit/loss if ST=185 Buy 100 shares of stocks and buy one August 165 put contract. Hold the position until expiration. Determine the breakeven stock price at expiration, the maximum profit and the maximum loss. What is the profit/loss if ST=150. Buy 100 shares of stock and write one October 170 call contract. Hold the position until expiration. Determine the breakeven stock price at expiration, the…

For each 1% change in the market portfolio's excess return, the investment's excess return is expected to change by due to risks that it has in common with the market. ..... А. 1% В. beta C. alpha D. 0%

Ch 02: Assignment - Risk and Return: Part I CAPM Elements Risk-free rate (TRF) Market risk premium (RPM) Happy Corp. stock's beta Required rate of return on Happy Corp. stock Happy Corp.'s new required rate of return is An analyst believes that inflation is going to increase by 3.0% over the next year, while the market risk premium will be unchanged. The analyst uses the Capital Asset Pricing Model (CAPM). The following graph plots the current SML. Tool tip: Mouse over the points on the graph Calculate Happy Corp.'s new required return. Then, on the graph, use the green points (rectangle symbols) to plot the new SML suggested by this analyst's prediction. RED RATE OF RETURN (Percent) 20.0 16.0 Value 2.0% 12.0 1.0 8.0 8.0% 7.7% 11.0% 12.1% 25.3% eir coordinates. O New SML

Assignant. How to use real Dato to draw the Efficient Frontier? Step: Choose 2 Stocks collect Date for 1 year (daily) Prices Colorlate Returns (daily returns) Pt+1 - Pt Pt R 7,41 STEP 2 6 。Comporte the Expected Return for each stock E(R) = Average Return = Σ Ri - • Compte Risk (6;) => √2 (2:-R)2 R mpute the CORR between the 2 stocks Compute Comply for cov) for

q5- provide step by step explaination (no excel)