Ch 08: Assignment - Risk and Rates of ReturnElle nolas a $5,000 portrollo that consists or rOur stocKs. Her investment in eacn stock, as well as each stock's beta,is listed in the following table:Standard DeviationStockInvestmentBetaPerpetualcold Refrigeration Co. (PRC)$1,7500.9012.00%Zaxatti Enterprises (ZE)1.70$1,00011.00%Western Gas & Electric Co. (WGC)$7501.1018.00%Makissi Corp. (MC)$1,5000.4025.50%Suppose all stocks in the portfolio were equally weightedSuppose all stocks in Elle's portfolio were equallyweighted. Which of these stocks would contribute theWhich of these stocks would have the least amount ofleast market risk to the portfolio?standalone risk?Makissi Corp.Perpetualcold Refrigeration Co.Makissi Corp.Western Gas & Electric Co.Zaxatti EnterprisesZaxatti EnterprisesWestern Gas & Electric CoO Perpetualcold Refrigeration Co.If the risk-free rate is 7% and the market risk premium is 9%, what is Elle's portfolio's beta and required return? Fillin the following table:Required ReturnBetaElle's portfolioO O O O

Multiple choice question: First oneBeta is an indicator of market risk. Hence the stock with least…

Answered: Ch 08: Assignment - Risk and Rates of…

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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XYZ stock price and dividend history are as follows: Dividend Paid at Year-End 5.5 Year 2010 2019 2020 2021 Beginning-of- Year Price An investor buys six shares of XYZ at the beginning of 2018, buys another three shares at the beginning of 2019, sells one share at the beginning of 2020, and sells all eight remaining shares at the beginning of 2021. $130 144 120 125 Required: a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Arithmetic Sime-weighted average retums Geometric time-weighted average returns Date 01/01/2018 01/01/2019 01/01/2020 01/01/2021 b-1. Prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2018, to January 1, 2021. (Negative amounts should be indicated by a minus sign.) Fale of retur % % Cash Flow b-2. What is the dollar-weighted rate of return? (Hint: If your calculator cannot calculate…
8. Portfolio risk and return Cheyenne holds a $7,500 portfolio that consists of four stocks. Her investment in each stock, as well as each stock's beta, is listed in the following table: Stock Investment Beta Standard Deviation Andalusian Limited (AL) $2,625 0.90 18.00% Tobotics Inc. (TI) $1,500 1.70 12.00% Three Waters Co. (TWC) $1,125 1.20 18.00% Makissi Corp. (MC) $2,250 0.60 25.50% Suppose all stocks in Cheyenne's portfolio were equally weighted. Which of these stocks would contribute the least market risk to the portfolio? Three Waters Co. O Tobotics Inc. O Andalusian Limited O Makissi Corp. Suppose all stocks in the portfolio were equally weighted. Which of these stocks would have the least amount of stand-alone risk? O Three Waters Co. O Makissi Corp. Tobotics Inc. O Andalusian Limited If the risk-free rate is 7% and the market risk premium is 8.5%, what is Cheyenne's portfolio's beta and required return? Fill in the following table: Beta Required Return Cheyenne's portfolio
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Stock A B 1. Consider the following market of 3 stocks: C Po $11 $54 $149 Qo 40 80 50 P₁ $17 $20 $158 Q1 40 160 50 Calculate the equal value weighted index. Please round your answer to two decimal places.
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Question content area top Part 1 (Preferred stock valuation) What is the value of a preferred stock where the dividend rate is 15 percent on a $100 par value, and the market's required yield on similar shares is 13 percent? Question content area bottom Part 1 The value of the preferred stock is $enter your response here per share. (Round to the nearest cent.)
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You've collected the following information from your favorite financial website. 52-Week Price Lo 47.80 70.28 143.13 Hi 64.60 145.94 181.19 82.56 113.19 64.13 96.20 a. Stock price b. Required return Stock (Dividend) Acevedo 1.12 Georgette, Incorporated 2.50 YBM 6.45 Manta Energy 3.12 Winter Sports 1.57 Dividend Yield % 1.9 2.1 3.9 4.3 1.9 % PE Ratio 35.6 70.9 23.8 17.6 15.5 Close Price 62.91 118.64 165.39 72.56 a. Using the dividend yield, calculate the closing price for Winter Sports on this day. Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. Assume the actual closing price for Winter Sports was $80.93. Analysts project a 4 percent dividend growth rate for Winter Sports. What is the required return for the stock using the dividend discount model and the actual stock price? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Net Change -.05 -.62 .19 .84 .10
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Portfolio risk and return Emma holds a $7,500 portfolio that consists of four stocks. Her investment in each stock, as well as each stock’s beta, is listed in the following table: Stock Investment Beta Standard Deviation Andalusian Limited (AL) $2,625 0.80 15.00% Kulatsu Motors Co. (KMC) $1,500 1.90 11.00% Water and Power Co. (WPC) $1,125 1.10 16.00% Makissi Corp. (MC) $2,250 0.50 28.50% If the risk-free rate is 7% and the market risk premium is 8.5%, what is Emma’s portfolio’s beta and required return? Fill in the following table: If the risk-free rate is 7% and the market risk premium is 8.5%, what is Emma’s portfolio’s beta and required return? Fill in the following table: BETA 0.9750 REQUIRED RETURN 0.8288 867.50% 0.6533 2,232.50% 1.4625 15.29% 1,895.96%
Ultra Petroleum (UPL) has earnings per share of $1.37 and a P/E ratio of 32.56. What's the stock price? (Round your answer to 2 declmal places.) Stock price < Prev 11 of 12 Next e here to search 直。
Use the following tables to assess the worthiness of Verticon stock as an investment. Verticon Stock Data (Current and Historical) 3:45PM EDT Aug 16, 2011 Price 18.85 USD Change +0.64 (+3.51%) Mkt cap 147.1B Div/yield 0.20/4.24 Shares 8,012 Beta 0.70 Book/share 11.335 EPS 1.11 12/2010 12/2009 12/2008 (Millions of Dollars) Total Assets 195,014 195,949 111,148 Total Liabilities 107,201 122,935 53,592 Preferred Shareholders’ Equity 52 61 73 Common Shareholders’ Equity 87,761 72,953 57,483 Shares Outstanding 8,012 8,070 6746 Book/Share ? 9.040 8.521 Q1 (Mar ’11) 2010 Net profit margin 15.24% 12.24% Return on equity 11.60% 9.30% Which one in bold? One of the most important features of a stock is its book value. The book value per share of Verticon’s stock for the year 2010 was equal to (10.954, 13.693, 11.502). Looking at the (Market cap, EPS, change in price, beta value, ROE) ,…

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