Intro The table below shows the expected rates of return for three stocks and their weight in some portfolio: Expected return 0.08 Weight 0.3 Stock A Stock B Stock C 0.03 0.14 0.2 0.5 Part 1 What is the expected portfolio return? 3+ decimals Submit
Q: Q9. Given the following probability distributions for the stocks of Celtic plc and Rangers plc…
A: SD is the measurement of risk which shown the risk associated with the return earned from the stock.…
Q: You have a large amount of money to invest for a short term of two years. You have done some market…
A: Let us calculate the amount available after 2 years under both the options:- Option 1: Invest money…
Q: For a call option of CN¥100,000 with the $0.16 exercise price and $0.0005 premium, When the spot…
A: A call option is an option contract which gives the holder the right but not an obligation to buy…
Q: Assume that you will invest $200 in one year, $400 in two years, and $600 in three years. If you…
A: Future Value: It is the worth of an asset at a future date based on an assumed pace of growth.
Q: The Cambodian interest rate is 6% and the Vietnam interest rate is 7%. The spot exchange rate of one…
A: Given: Interest rate in Vietnam = 7% Interest rate in Cambodian = 6% Spot exchange rate = VND 5.6…
Q: Hoyden Co.'s bonds mature in 13 years and pay 8 percent interest annually. If you purchase the…
A: Here,
Q: Which of the following statements is most correct? Why?* a. If a market is weak-form efficient, this…
A: Efficient market hypothesis is one of the basic theorem used to understand the market movement s and…
Q: Enterprise, Inc. bonds have an annual coupon rate of 14 percent. The interest is paid semiannually…
A: Here, Coupon rate is 14% Time Period is 13 years Par Value is $1,000 YTM is 8%
Q: What did LebroJames, Inc. report as Net Cash Flow from Operating Activities for Year 2? What did…
A: Net Cash Flow from Operating Activities: It shows the amount of money/cash being generated by the…
Q: Compute the NPV for Project M if the appropriate cost of capital is 9 percent. (Negative amount…
A: Solution:- Net Present Value (NPV) means the net present value of cash inflows of project after…
Q: Finance Explain various cash management objectives and decisions.
A: Cash Management: It is the method of managing cash flows and a vital part in company's financial…
Q: John sells a product for $65 and it cost $30 to produce (UVC) and has fixed cost (FC) of $175,000…
A: Break-Even Point of Sales is that point on which company will recover all cost ( Variable Cost +…
Q: 4. What is the result of repaying debt? (Ignoring changes in the cost of capital) A B C D A decrease…
A: 1)Debt is a liability.Repayment of debt involves reduction of liability and reduction of cash. 2)…
Q: Maggie’s Skunk Removal Corp.’s 2021 income statement listed net sales of $12.8 million, gross profit…
A: Since you have posted a question with multiple sub-parts, we will solve the first three subparts for…
Q: Bank ZLY is charging customers a loan rate of 9.2% APR compounded monthly. What is the equivalent…
A: Equivalent Effective Annual rate= It refers to that interest rate which is actually earned on a…
Q: 3. Compute for the following: Required: Payback period, payback reciprocal, accounting rate of…
A: Capital Budgeting Tools: It is the method where Value of potential investment is estimated .…
Q: Consolidated Pasta is currently expected to pay annual dividends of $10 a share in perpetuity on the…
A: Hi There, Thanks for Choosing Bartleby, As per the honor code we are supposed to give the answer of…
Q: Draw the profit-of-the-call line for a call with exercise price $50 and premium $3.
A: Given: Exercise price is $50 Premium = $3 ---------------------------- Call option gives holder a…
Q: Amber Marbella is planning to invest on a certain project but will be needing of funds, fortunately…
A: The question is related to cost of capital. The cost of equity is calculated with the help of…
Q: Explain why there is a cost associated with retained earnings
A: Retained profits are the organization's undistributed accumulated profit. It is the profit after…
Q: You bought a split type aircon and decided to avail a buy now, pay later - zero % interest scheme.…
A: Monthly Payment P 3,800.00 Time Period 12 Months Interest rate 0%
Q: What is Company A’s intrinsic value
A: Dividend discount model refers to a stock valuation model which is used by the company for…
Q: Gossman Corporation is analyzing a capital expenditure that will involve a cash outlay of P104,904.…
A: Internal Rate of Return is that rate at which Present Value of Cash Inflow is equal to Present value…
Q: Intro You've assembled the following portfolio: Stock Exp. return Investment 1 6.9% 2 14.7% 3 16.3%…
A: As per the given information: StockExp. returnInvestment16.9%$5,000214.7%$12,000316.3%$7,000
Q: One university needs some maintenance. The owner of the university decides to deposit $400000 in an…
A: Present worth can be calculated as below Present worth = Cash flow / (1+r)^n It can also be…
Q: 1a. In 1895, the winner of a competition was paid $110. In 2006, the winner's prize was $70,000.…
A: As per Bartleby honor code, when multiple independent questions are asked, the expert is required…
Q: CTY Inc just made a deposit of $1.5 million in an account expected to earn 10.8% APR compounded…
A: Future Value Future value refers to the value of the investment at a certain point of time in future…
Q: The following information is available for the capital structure of TestraQ Group: Debt:…
A: " Hi, Thanks for the Question. Since you asked multiple sub parts question, we will answer first…
Q: USE THE DATA IN THE TABLE BELOW TO ANSWER THE FOLLOWING 3 QUESTIONS StepCurry, Incorporated Balance…
A: The question is related to Cash Flow Statement. Cash Flow Statement is summary of cash receipts and…
Q: To help buy her new condominium, Maria is taking out a $154,000 mortgage loan for 30 years at 3.7%…
A: In case of mortgage loan interest is charged on the outstanding balance. We also know that…
Q: Intro You've estimated the following expected returns for a stock, depending on the strength of the…
A: As per the given information: StateProbabilityExpected…
Q: interest will she pay when she repays her loan on June 15? 2. What is the total amount
A: A loan amount refers to the amount which a person should borrow from the bank or financial…
Q: BALANCE SHEET Cash $ 140.0 Accounts payable $ 800 .0 Accts. receivable 880 .0 Notes payable 600.0…
A: The question is related to the Ratio Analysis. He Return on Equity is calculated with the help of…
Q: What happened to the dollar following the announcement by the Group of Five that it would be…
A: Plaza Accord in 1985 was an agreement which was made by G-5 countries with the aim of reducing the…
Q: he accounting year / self capital at the beginning of the accounting year) of Xijiang in each…
A: Internal retention ratio is calculated as shown below. Internal retention ratio=Net…
Q: What’s the current yield of a 4.10 percent coupon corporate bond quoted at a price of 101.68? (Round…
A: To calculate the current yield we will use the below formula Current yield = Coupon rate/Quoted…
Q: On September 1, the home mortgage balance was $159,000 for the home owned by Sam Richardson. The…
A: In case or Mortgage Interest is charges on the outstanding balance. we know that Installment…
Q: An interest in advance collected from an amount of ₱85,500 borrowed for 450 days and discount rate…
A: Face Value = ₱85,500 Time Period = 450 Days Discount rate = 11.64%
Q: A loan, amortized over 7 years, is repaid by making payments of $1,600 at the end of every month. If…
A: Given: Particulars Amount Interest rate 3.25% Years 7 Payments $1,600
Q: A6) Finance If $150 is placed in an account that earns a nominal annual interest rate of 6 percent,…
A: To calculate the future value we will use the below formula Future value = P*[1+(r/m)]t*m Where P…
Q: A vegetable stand owner purchases onions at the rate of P350 per kg daily and sells it at the rate…
A: Profit or loss can be calculated as follows = Selling price - Cost of product If the above figure is…
Q: Assume an investor takes a long position in 4 September KLSE CI futures contract on 15th July. The…
A:
Q: Calculate the return on equity (after tax) ratio. (Round your answers to the nearest hundredth.)…
A: Return on Equity: It is a measure of the profitability of a company and it is estimated by dividing…
Q: Jan 2, 2015 Sep 27, 2016 $1.20 $1.12 1 British Pound (GBP) $1.56 $1.30 1 $US 1 Euro 119.69 Yen
A: Given, Jan 2,2015 1 Euro= $ 1.20 $ Euro…
Q: Q)Of the basic types of economic evaluation methodology , which of them addresses the following, and…
A: Economic methodology is defined as the study of the methods basically the scientific method, which…
Q: The price-to-earnings ratio: ( al is of little value to investors these days due to the fact that…
A: The price-earning ratio, or P/E ratio, is another name for the comparison between the stock's market…
Q: Suppose that an investor buy a call option on IBM stock with strike price X = 60 USD, which has 6…
A: A call option is a type of contract where the buyer of the call option has the choice of buying the…
Q: mpounded semi-annually, calculate the size of the lease payment made at the beginning of each…
A: Lease are one form of rental and it gives right to use the equipment by payment of periodic…
Q: Medwig Corporation has a DSO of 36 days. The company averages $8,000 in sales each day (all…
A: DSO means days sales outstanding. It means number of days it takes credit sales to be converted into…
Q: What interest rate was applied for ₱16,400 to earn interest of ₱3,600 invested for 650 days using…
A: Principal Amount (P) = ₱16,400 Interest Amount (I) = ₱3,600 Total Amount Accured (A) = Interest +…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Consider the following stocks with equal probabilities of return: Outcome | Return (Stock A) | Return (Stock B) 1 -5% 2% 2 10% 12% 3 18% 15% Compute the expected returns of stock A and B. Compute the total risk and relative risk of stock A and B. Which stock is risky? Ignoring the probabilities, what is the total risk and relative risk of stock A and B? Which stock is risky? Round-off final answers only to two decimal places.Consider the following stocks with equal probabilities of return: Outcome Return Stock A Return Stock B 1 -5% 2% 2 10% 12% 3 18% 15% a. compute the expected returns of stock A and B. b. compute the total risk and relative risk of stock A and B. Which stock is risky? c. Ignoring the probabilities, what is the total risk and relative risk of stock A and B? Which stock is risky? Round-off final answers only to two decimal places. Attach hand-written/excel solution here.Following is information for two stocks: Investment r σ Stock X 8% 10% Stock Y 24% 36% Which stock has the greater relative risk? (show the computation of the relative risk for X & Y.)
- Problem 1 You are given the following information about stock X and the market portfolio, M: Riskless Asset (f) Stock X Market Portfolio (M) E(r) 0.04 (4%) ? 0.10 σ 0.00 0.30 0.20 You are not given the expected return of stock X. The correlation of the returns on the stock X and the market portfolio is equal to 0.4. a) What is the beta (6) of stock X? b) Assuming the CAPM holds, what is the expected return on stock X? c) You have $1,000 to invest in some combination of the risk-free asset, stock X, and the market portfolio. You are thinking of investing $300 in the risk free asset, $400 in stock X, and $300 in the market portfolio. What is the overall expected return, standard deviation and beta of this portfolio?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).Question 1 Suppose you have the following expectations about the market condition and the returns on Stocks X and Y. Market Condition Probability Return on Stock X Return on Stock Y Bear Market 0.3 -3% -5% Normal Market 0.5 3% 5% Bull Market 0.2 8% 15% a) What are the expected returns for Stocks X and Y, E(rX) and E(rY)? b) What are the standard deviations of the returns for Stocks X and Y, σX and σY?
- Astromet is financed entirely by common stock and has a beta of 1.20. The firm pays no taxes. The stock has a price-earnings multiple of 11.0 and is priced to offer a 10.9% expected return. The company decides to repurchase half the common stock and substitute an equal value of debt. Assume that the debt yields a risk-free 4.6%. Calculate the following: Required: a. The beta of the common stock after the refinancing b. The required return and risk premium on the common stock before the refinancing c. The required return and risk premium on the common stock after the refinancing d. The required return on the debt e. The required return on the company (i.e, stock and debt combined) after the refinancing If EBIT remains constant: f. What is the percentage increase in earnings per share after the refinancing? g-1. What is the new price-earnings multiple? g-2. Has anything happened to the stock price? Complete this question by entering your answers in the tabs below. Reg A to E Reg F to G2…And what are the expected returns for stocks A and B if the conditions are as follows? A0 0.03 k1 0.09 k2 0.07 ba,1 1.5 ba,2 0.8 bb,1 1.2 bb,2 0.6- (a) 2 Your answer is partially correct. Try again. What is the average return and standard deviation for each stock? (Round answers to 2 decimal p АВС XYZ Average return 6.00 % 6.25 % Standard deviation 8.90 % 1.55 10.28% SHOW SOLUTION LINK TO TEXT LINK TO TEXT v (b) What is the expected portfolio return on a portfolio comprised of i. 25% ABC and 75% XYZ? ii. 50% ABC and 50% XYZ? (Round answers to 3 decimal places, e.g. 5.275.) E(Portfolio Return) 25% ABC and 75% XYZ 50% ABC and 50% XYZ
- Plz show the formula step by step. There is the following table shows the probabilities of occurrence of 3 states and the expected rate of returns on stocks A and B State Probability Expected rate ofReturns on Stock A Expected rate ofReturns on Stock B Boom 0.5 0.25 0.20 Neutral 0.3 0.15 0.10 Recession 0.2 0.05 0.02 (A) Calculate the expected rates of returns and standard deviations of stocks A and B. The colleague has given you his forecasts of stocks C and D as follows: State Probability Expected rate ofReturns on Stock C Expected rate ofReturns on Stock D Boom 0.7 0.40 -0.10 Bust 0.3 -0.05 0.30 She would like to invest 80% of his money in stock C and 20% of her money in stock D to construct a portfolio.(B) Calculate the portfolio's expected rate of returns and its standard deviationIntro We know the following expected returns for stocks A and B, given different states of the economy: State (s) Probability E(rA.s) E(rB,s) -0.1 0.04 0.08 0.05 0.13 0.07 Recession 0.2 Normal 0.5 Expansion 0.3 Part 1 What is the expected return for stock A? 3+ decimals SubmitConsider information given in the table below and answers the question asked thereafter: State Probability return on stock A Return on stock B A 0.15 10% 9% B 0.15 6% 15% C 0.10 20% 10% D 0.18 5% -8% E 0.12 -10% 20% F 0.30 8% 5% i. Calculate expected return on each stock? On the basis of this measure, which stockyou will choose?ii. Calculate standard deviation of the returns on each stock? On the basis of thismeasure, which stock you will choose?iii. Calculate coefficient of variance of the returns on each stock? On the basis of thismeasure, which stock you will choose?