Drawing Examples ven the following information, what is e standard deviation of the returns on is stock? State of Economy Probability of State of Economy Rate of Return .26 Вoom Normal 04 74 17
Q: Suppose rRF = 9%, ľM = 14% and b; = 13 What is r;, the required rate of return on Stock i?
A: Given: Risk free return (rRF)=9%Market returnrM=14%Beta coefficient(bi)=13
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A: Solution:
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A: Standard deviation represents the measurement of variation in the amount of values.
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A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If…
Q: Suppose rRF = 9%, rM = 14%, and bi = 1.3. %3D · What is ri, the required rate of return on Stock i?
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A: Given Forward dividend = $2.08 1T Target Est = $105.28 Required return = 11.5%
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Q: What is the expected return for the following stock? (State your answer in percent with one decimal…
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Q: What is the standard deviation of the returns on a stock given the following information? State of…
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Q: What is the expected return for the following stock? (State your answer in percent with one decimal…
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Q: tate probability Return on A RETURN ON B POOR 40% -0.06 -0.09 NORMAL 35% 0.16 0.14 GOOD 25% 0.2 0.3…
A: The expected return of a stock is the minimum rate of return that an investor expects from his…
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- Home Courses Groups Calendar Support BAU BAUGO BAU Library IF3224 (2) Financial Mark... Overview Plans Resources Status and follow-up Participants More - QuestionT1 The following information for Stock A, Stock B and Stock C are given: State of Economy Probability of State Stock A Return Stock B Return Boom 0.10 0.30 0.20 Good 0.40 0.20 0.10 Poor 0.50 -0.25 -0.06 Variance(Stock C)-0.08 Covariance(Stock A, Stock C)-0.020 Covariance(Stock B, Stock C)-0.007 If you form a portfolio and invest 20% of your money into Stock A, 35% into Stock B and, 45% of it into Stock C, what will be the standard deviation of the portfolio? (Answer is rounded) Your answer: 1433 0.136 41°C ENG 22/06/202State ofEconomy Probabilityof State Return on AssetDin State Return on AssetEin State Return on AssetFin State Boom 0.35 0.060 0.310 0.25 Normal 0.50 0.060 0.180 0.20 Recession 0.15 0.060 -0.210 0.10 1.As an investor, compare Stock E with Stock F, and identify which stock willyou select and why.Suso a'ymonst, gainuani yd mes vam tan odi lliw inong doum wol Question 6 vani ristlichsupe. ne begrerlo.ai vrstsl, tedi ne hotquis ad gonsmaai to pie ori bluoda woH (b) The following information is given about Stock P, Stock Q and the market.inq Guimsig songweni sei Joees vi Stock P Stock Q Market + Expected return Volatility Correlation with market return 30% -0.20 25% 0.35 21% IT 3.5% 3.8% 6.0% VOEGOT - - 66 E noitesuQ iliu a onsal tedi nolsa c (s) The risk-free rate of return is 3% per annum. Calculate the required returns for both stocks. Then, determine which of the two stocks an investor should invest in.Ito noitesque adi svns Toolse 19d Ilse of songs lliw ada doidw to song teswol sdt ei tadW ode
- The market and Stock J have the following probability distributions: Probability rM rJ 0.3 15.00 % 19.00 % 0.4 10.00 6.00 0.3 18.00 10.00 The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet Calculate the expected rate of return for the market. Do not round intermediate calculations. Round your answer to two decimal places.fill in the blank %Calculate the expected rate of return for Stock J. Do not round intermediate calculations. Round your answer to two decimal places.fill in the blank % Calculate the standard deviation for the market. Do not round intermediate calculations. Round your answer to two decimal places.fill in the blank %Calculate the standard deviation for Stock J. Do not round intermediate calculations. Round your answer to two decimal places.fill in the blank %13:19 M O - Fnan301FinalExamFall2...ba1995f96f6315dff9f7 5 ii) Capital gains yield iii) Total rate of return (yield) 4. Based on the following information Calculate State of Economy Probability of State of Economy Rate of Return if State Occurs Stock A Stock B Recession 0.20 0.05 -0.17 Normal 0.55 0.08 0.12 Вoom 0.25 0.13 0.29 a) The expected return of Stock A (7.5 points) b) The expected return of Stock B (7.5 points) c) The expected return of Portfolio where you invest $35,000 in Stock A and $45,000 in Stock B (5 points) d) Suppose Stock A has a beta of 0.8 and Stock B has a beta of 1.3. If you invest $35,000 in Stock A and $45,000 in Stock B, what is the beta of this portfolio? (5 points) e) Expected return on the market (RM) is 10% and the risk-free (rr) is 4%. What must the the expected return on the portfolio according to CAPM? (Use the beta you have calculated in section d) for CAPM) (5 points) ||What are the expected returns of stock "A" and "B"? Enter your answers as a percentage. Do not put the percent sign in your answers. Round your answers to 2 DECIMAL PLACES.\\n \\nE(ra)= \\nCorrect response: 4.52\\\\pm 0.01\\nE(rb)= \\nCorrect response: 6.04\\\\pm 0.01\\n \\nClick "Verify" to proceed to the next part of the question.\\nThis questions has 4 parts (i.e., you will be clicking "Verify" 4 times)\\n \\n \\n \\n\\n \\n \\nWhat are the standard deviations of stocks "A" and "B"? Enter your answers as a percentage. Do not put the percent sign in your answers. Round your answers to 2 DECIMAL PLACES.\\n \\nSDa= \\nCorrect response: 8.49\\\\pm 0.01\\nSDb= \\nCorrect response: 13.06\\\\pm 0.01\\n \\nClick "Verify" to proceed to the next part of the question.\\n \\n \\n \\n \\n \\n \\nWhat is the expected return of the portfolio? Enter your answer as a percentage. Do not put the percent sign in your answer. Round your answer to 2 DECIMAL PLACES.\\n \\nE(rp)= \\n \\nClick…
- Etivity: Characteristic Line and Security Market Line Year 1 2 34567 HISTORICAL RATES OF RETURN Stock X NYSE - 26.5% Beta = 37.2 23.8 - 7.2 6.6 20.5 30.6 - 24.0% 24.0 19.5 4.0 10.1 17.7 17.5 The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. X Open spreadsheet a. Use a spreadsheet (or a calculator with a linear regression function) to determine Stock X's beta coefficient. Do not round intermediate calculations. Round your answer to two decimal places. X b. Determine the arithmetic average rates of return for Stock X and the NYSE over the period given. Calculate the standard deviations of returns for both Stock X and the NYSE. Do not round intermediate calculations. Round your answers to two decimal places. NextYou are given the following information: State ofEconomy Return onStock A Return onStock B Bear .112 −.055 Normal .105 .158 Bull .083 .243 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…Back to Assignment Attempts 0 1. Problem 8.01 (Expected Return) eBook A stock's returns have the following distribution: Average 0 / 4 Standard deviation: Coefficient of variation: Sharpe ratio: 0.1 0.1 0.3 0.3 0.2 1.0 Assume the risk-free rate is 2%. Calculate the stock's expected return, standard deviation, coefficient of variation, and Sharpe ratio. Do not round intermediate calculations. Round your answers to two decimal places. Stock's expected return: % Problem Walk-Through % Demand for the Company's Products Probability of this Demand Occurring Weak Below average Average Above average Strong Rate of Return if this Demand Occurs (30%) (10) 18 37 63
- SupposerRF=5%,rM=12%, andbi=2, what isri, the required rate of return on Stock i?12%7%19%5% I need answer typing clear urjent no chatgpt .SCHOOL OF BUSINESS ADMINISTRATION Corporate Financial Management FINC 401 Answer the following questions 1. Consider the following information: Rate of Return if State Occurs Probability of State of Economy State of Economy Stock A Stock B Recession .21 .06 -.21 Normal .58 .09 .08 Вoom .21 .14 .25 a. Calculate the expected return for Stocks A and B. b. Calculate the standard deviation for Stocks A and B. 2. Suppose a stock had an initial price of $74 per share, paid a dividend of $1.65 per share during the year, and had an ending share price of $61. a. Compute the percentage total return. b. What was the dividend yield and the capital gains yield? 3. Suppose you bought a bond with an annual coupon of 6% one year ago for $1,010. The bond sells for $1,025 today. a. Assuming a $1,000 face value, what was your total dollar return on this investment over the past year? b. What was your total nominal rate of return on this investment over the past year? 4. Consider the following information:…tol Processing ng Help Save & Exit Submit Saved Practice Problems i Check my work Eaton Electronic Company's treasurer uses both the capital asset pricing model and the dividend valuation model to compute the cost of common equity (also referred to as the required rate of return for common equity). Assume: Rf = 7% Km 10% = 1.6 D1 = $ 0.70 $ 19 8% %3D PO = nt a. Compute Ki (required rate of return on common equity based on the capital asset pricing model). (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) ences Ki b. Compute Ke (required rate of return on common equity based on the dividend valuation model). (Do not round intermediate calculations, Input vour answer as a percent rounded to 2 decimal places.) < Prev 10 of 10 Next Mc Graw Hill 149 MacBook Air