BUSI 2093 | UNIT 9 | Risk and Return QUESTION 1 I see I have a mixture of stocks, bonds, ETFs and derivatives in my portfolio. Could you explain why I hold so many different types of asset? type your text here Submit
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A: Step 5: Calculate Tax on Gain Tax on Gain=Gain ×Tax Rate Tax on Gain=0.75528×0.21=0.1586088million…
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A: EXPLANATIONTo determine the Operating Cash Flow (OCF) for the project, we start with the given…
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A: Step 1 Manager′s return=0.34 × 20% + 0.2×15%+0.34×10%+0.12×5%=0.138 Manager's return = 13.80% Index…
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- Question 5 In class, we discussed the CAPM model and its implications. What is the market portfolio? What assets does the model price? Is the S&P 500 a good proxy for the market portfolio, and if not, why? Please elaborate.MINDTAP Q Search this course Zulaikha binti M ian 1 aining: 1:13:50 Save Submit Test for Gradi « Question 36 of 50 Which of the following statements is CORRECT? O a. Money markets are markets for long-term debt and common stocks. O b. Money market mutual funds usually invest their money in a well-diversified portfolio of liquid common stocks. O c. The NYSE operates as an auction market, whereas NASDAQ is an example of a dealer market. d. While the distinctions are becoming blurred, investment banks generally specialize in lending money, whereas commercial banks generally help companies raise capital from other partles. O e. A liquid security is a security whose value is derived from the price of some other "underlying" asset. N W. > 低日见里 be here to searchces Problem 6-14 (Algo) Suppose that many stocks are traded in the market and that it is possible to borrow at the risk-free rate, rf. The characteristics of two of the stocks are as follows: Correlation = -1 Rate of return Stock A B Required: a. Calculate the expected rate of return on this risk-free portfolio? (Hint: Can a particular stock portfolio be formed to create a "synthetic" risk-free asset?) (Round your answer to 2 decimal places.) Yes No Expected Return 5% 10% % Standard Deviation 45% 55% b. Could the equilibrium rf be greater than rate of return?
- Use the following spreadsheet pleaseH2. What are the different types of expected return and related risk, for individual assets and for portfolios as a whole. Explain carefully what each type represents and give examples in each case. What type of expected returns does the CAPM model capture? What type of expected return and risk you are exposed to if you have the FTSE 100 INDEX only in the portfolio?portfolio.. - Word **** References Mailings Review View Help RCM Acrobat Foxit Reader PDF Foxit PDF 5. The risk-free rate and the expected market rate of return are 0.04 and 0.14, respectively. According to the capital asset pricing model (CAPM), the expected rate of return on security X with a beta of 1.25 is equal to: a. 0.004 b. 0.165 C. 0.121 d. 0.132
- urgent plzzzzzzzSheet 5 Use Sheet 5 to complete the following Date AMZN Return BAC Return Market Return Risk-Free Return AMZN Excess Return* BAC Excess Return* Market Excess Return* 3/1/2017 0.05 -0.04 0.04 0.0050 0.04 -0.05 0.03 4/1/2017 0.04 -0.01 0.00 0.0050 0.04 -0.02 -0.01 5/1/2017 0.08 -0.04 0.01 0.0050 0.07 -0.04 0.00 6/1/2017 -0.03 0.08 0.01 0.0050 -0.03 0.08 0.01 7/1/2017 0.02 -0.01 0.00 0.0050 0.02 -0.01 0.00 8/1/2017 -0.01 -0.01 0.02 0.0050 -0.01 -0.01 0.01 9/1/2017 -0.02 0.06 0.00 0.0050 -0.02 0.06 0.00 10/1/2017 0.15 0.08 0.02 0.0050 0.14 0.08 0.01 11/1/2017 0.06 0.03 0.02 0.0050 0.06 0.02 0.02 12/1/2017 -0.01 0.05 0.03 0.0050 -0.01 0.04 0.02 1/1/2018 0.24 0.08 0.01 0.0050 0.24 0.08 0.00 2/1/2018 0.04 0.00 0.06 0.0050 0.04 0.00 0.05…MC Qu. 41-16 When investors purchase a security... When investors purchase a security, they are buying which of the following? Multiple Choice O Only bonds Only stock A piece of paper What the paper represents
- Finance (a) Consider a portfolio with a Delta of 100, a Gamma of -20, and a Vega of -10. There are two traded options available: Traded options 1 Traded options 2 Delta 0.2 -0.1 Gamma Vega 0.01 0.05 0.5 0.3 What position in the traded option and/or underlying stock would make the portfolio Gamma and Vega neutral? (Required: Show your work step by step)CASE 3 (6 marks): The following graph shows the efficient frontier for the portfolio containing x, y and z securities EFFICIENT FRONTIER 0.00525 D 0.00475 В A 0.00425 W 0,00375 0.00325 0.00275 0.006 0.0065 0.007 0.0075 0.008 0.0085 op 3 а) Which combination of the portfolio is most efficient or the closest to optimal, A, B, C or D and why? Additionally, explain the difference between each of these portfolios. 3 b) If the star represents portfolio E, is it better than B? Explain why or why not. 3 c) If the triangle represents portfolio F, is it better than C? D? Explain why or why not. ERPMatch the words with the term. Question 14 options: 12345 venture capital 12345 quality of security to satisfy investors 12345 long term debt financing 12345 uncertainty 12345 share versus debt financing 1. business risk 2. instrument risk 3. risk capital 4. bond 5. financial risk