2. If a company has a portfolio consisting of 3 stocks as follows: 25 percent, 30 percent, and 45 percent of the total value of the portfolio are invested in stocks 1,2 and 3 respectively. And the returns of these three stocks are as follows: Stock Return 1 8.50% 2 10.20% 3 9.70% What is the return of this portfolio?

2. If a company has a portfolio consisting of 3 stocks as follows: 25 percent, 30 percent, and 45 percent of the total value of the portfolio are invested in stocks 1,2 and 3 respectively. And the returns of these three stocks are as follows: Stock Return 1 8.50% 2 10.20% 3 9.70% What is the return of this portfolio?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Calculate the Holding Period Return (HPR) for the portfolio of the three stocks mentioned in Table 1. Calculate the Holding Period Return (HPR) for each of the stock A, B, and C individually given in Table 1. C. Based upon your calculations, evaluate the Holding Period Return (HPR) to exhibit what change in wealth has taken place?
What is the standard deviation of a portfolio formed of shares A and B? Asset (A) E(R₂) = 9% SDA = 4% W₁ = 0.4 Select one: A. 4.99% B. 4.56% C. 3.68% D. 5.16 Asset (B) E(R₂) = 11% SDB = 6% WB = 0.6 COVA, B = 0.0011
What is the beta of a portfolio comprised of the following securities? Stock Amount Invested Security Beta- 0.86 1.76 1.35 A B C $3600 $ 2800 $ 9000 Beta of portfolio to 2 decimal places is Numeric Response
Consider a portfolio with stocks A, B, and C. The total value of the portfolio is $245,000 and it is fully invested in these 3 stocks. $85,653 is invested in A and $69,552 is invested in B. The Betas of stocks A, B, and C are 1.2, .8, and 1.62, respectively. What is the Beta of the portfolio overall?
Give the return of the stock in which you would most likely invest and show the preferred order of the stocks if you were considering further investment, all other things being equal. Stock Beta Risk-Free Market-Rate CA-K 0.95 5.5% 9% AU-L 1.05 6% 8.5% TT-M 1.10 5% 8%
Q2 - Returns on stocks X and Y are listed below: Period 1 2 3 4 5 6 7Stock X 4% -2% 5% -1% 10% 7% 12%Stock Y -3% 7% 4% 2% 2% 8% -3% Consider a portfolio of 10% stock X and 90% stock Y. What is the mean of portfolio returns? Please specify your answer in decimal terms and round your answer to the nearest thousandth (e.g., enter 12.3 percent as 0.123).
An Investor has $100,000 invested in a 2-stock portfolio. $50,000 is invested in Stock X and the remainder is invested in Stock Y. X's beta is 1.35 and Y’s beta is 1.50. What is the portfolio's beta?
Donald Gilmore has $100,000 invested in a 2-stock portfolio. $32,500 is invested in Stock X and the remainder is invested in Stock Y. X's beta is 1.50 and Y's beta is 0.70. What is the portfolio's beta? Select the correct answer. a. 0.87 b. 0.90 c. 0.93 d. 0.99 e. 0.96
Suppose that the average stock has a volatility of 58%, and that the correlation between pairs of stocks is 18%. Estimate the volatility of an equally weighted portfolio with: a. 1 stock b. 30 stocks c. 1,000 stocks
Consider the annual returns produced by two different active equity portfolio managers (A and B) as well as those to the stock index with which they are both compared: Period Manager A Manager B Index 1 12.7 % 13.5 % 11.6 % 2 -1.6 -4.5 -2.3 3 14.9 13.2 18.9 4 0.5 2.2 -0.6 5 -7.6 -6.7 -3.5 6 24.8 24.3 21.6 7 -10.7 -12.2 -13.2 8 5.2 5.5 5.1 9 2.6 4.3 2.6 10 19.1 18.3 19.3 Did either manager outperform the index, based on the average annual return differential that he or she produced relative to the benchmark? Use a minus sign to enter negative values, if any. Do not round intermediate calculations. Round your answers to two decimal places. Manager A: % Manager B: % 's average return is less than the index and 's average exceeded that of the index. Calculate the tracking error for each manager relative to the index. Which manager did a better job of limiting his or her client's unsystematic…
) The following questions are based on the given information from table of probability distributions of returns on investment individual shares and portfolio below: Table 3: Probability distributions of returns on investment for individual shares and portfolio. State of Probability of the States Return on Share A Return on Share B (rB) Return on Portfolio AB (ran) Economy (ra) 0.20 0.20 0.20 0.20 0.20 15% -5% 5% 35% 25% -5% 15% 25% 5% 35% 5% 5% 15% 20% 30% -234
A stock has a dividend yield of 2.85% and a capital gains yield of 6.93%. What is the stock's required return?

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