Given the following holding-period returns, compute the average returns and standard deviation for Sugita Corp and for the the market portfolio. Month 1 2 3 4 5 6 Given Sugita Corp. 1.8% -0.5% 2% -2% 5% 5% a. 1.25%, 2.59% for Sugita and 1.88%, 1.95% for Market b. 1.88%, 2.59% for Sugita and 1.25%, 1.95% for Market c.1.95%, 2.59% for Sugita and 1.88%, 1.95% for Market d.1.88%, 1.95% for Sugita and 2.59%, 1.95% for Market O a.. O b.. Oc.. d.. Market 1.50% 1.00% 0.00% -2.00% 4.00% 3.00%

Given the following holding-period returns, compute the average returns and standard deviation for Sugita Corp and for the the market portfolio. Month 1 2 3 4 5 6 Given Sugita Corp. 1.8% -0.5% 2% -2% 5% 5% a. 1.25%, 2.59% for Sugita and 1.88%, 1.95% for Market b. 1.88%, 2.59% for Sugita and 1.25%, 1.95% for Market c.1.95%, 2.59% for Sugita and 1.88%, 1.95% for Market d.1.88%, 1.95% for Sugita and 2.59%, 1.95% for Market O a.. O b.. Oc.. d.. Market 1.50% 1.00% 0.00% -2.00% 4.00% 3.00%

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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You are given the three EPS estimates and the following estimates related to the market earnings multiple: EPS D/E Nominal RFR Risk premium ROE One shoul✓ -Select- a. Based on the three EPS and P/E estimates, compute the high, low, and consensus intrinsic market value for the S&P Industrials Index in 2018. Do not round intermediate calculations. Round your answers to the nearest cent. High intrinsic market value: $ Low intrinsic market value: $ underweight overweight Consensus intrinsic market value: $ b. Assuming that the S&P Industrials Index at the beginning of the year was priced at 2,050, compute your estimated rate of return under the three scenarios from Part a. Do not round intermediate calculations. Round your answers to one decimal place. Use a minus sign to enter negative rates of return, if any. Rate of return (optimistic scenario): Rate of return (pessimistic scenario): Rate of return (consensus scenario): Assuming your required rate of return is equal to the consensus,…
The historical returns data for the past three years for Company A's stock is -6.0%, 15%, 15% and that of the market portfolio is 10%, 10% and 16%. According to the security market line (SML), the Stock A is:A. Over priced B. Under priced C. Correctly pricedD. Need more information
The returns on Relnvest Ltd. and GEM Inc. stocks over the past five months are as follows: Relnvest Ltd GEM Inc January 15% -3% February -3% 3% March 8% 4% April May -1% 13% -4% -2% a. Calculate the standard deviation of the returns of each stock. b. Calculate the standard deviation of the returns of a portfolio that invests in both stocks equally each month. c. Which stock is least risky if held on its own? Is the standard deviation of your portfolio returns smaller or higher than the standard deviation of this stock? What is the underlying reason to this result?
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Consider the following returns of Stock 1 and Stock 2: Stock 1 Stock 2 Realized Realized Year End Return Return 2004 20.1% -14.6% 2005 72.7% 4.3% 2006 -25.7% -58.1% 2007 56.9% 71.1% 2008 6.7% 17.3% 2009 17.9% 0.9% Suppose you have a portfolio that is made up of 70% investments in Stock 1 and 30% investments in Stock 2. Compute: 1) Average annual return of the portfolio from 2004 to 2009; 2) Variance of the portfolio; 3) Standard deviation of the portfolio.
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Suppose Johnson & Johnson and the Walgreen Company have the expected returns and volatilities shown below, with a correlation of 22.2%. Johnson & Johnson Walgreen Company E [R] 7.2% 9.3% SD [R] 16.8% 20.4% For a portfolio that is equally invested in Johnson & Johnson's and Walgreen's stock, calculate: a. The expected return. b. The volatility (standard deviation). a. The expected return. The expected return of the portfolio is ☐ %. (Round to one decimal place.) b. The volatility (standard deviation). The volatility of the portfolio is %. (Round to one decimal place.)
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