Problem 4-10 The composition of the Fingroup Fund portfolio is as follows: Stock A B с D Shares 200,000 272,000 414,000 540,000 Price $39 50 34 35 During the year the portfolio manager sells all of the holdings of stock D and replaces it with 200,000 shares of stock E at $55 per share and 197,500 shares of stock F at $40 per share.

Problem 4-10 The composition of the Fingroup Fund portfolio is as follows: Stock A B с D Shares 200,000 272,000 414,000 540,000 Price $39 50 34 35 During the year the portfolio manager sells all of the holdings of stock D and replaces it with 200,000 shares of stock E at $55 per share and 197,500 shares of stock F at $40 per share.

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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Similar questions

The composition of the Fingroup Fund portfolio is as follows: Stock Shares Price A 200,000 $ 34 B 280,000 38 C 410,000 30 D 580,000 45 During the year the portfolio manager sells all of the holdings of stock D and replaces them with 200,000 shares of stock E at $30 per share and 300,000 shares of stock F at $67 per share. What is the portfolio turnover rate? (Round your answer to 1 decimal place.) Turnover rate %
Problem 4-14 (Algo) The composition of the Fingroup Fund portfolio is as follows: Stock A 11 C D Shares 240,000 340,000 440,000 640,000 Turnover rato Price $ 30 35 10 15 Required: If during the year the portfolio manager sells all of the holdings of stock D and replaces it with 240,000 shares of stock E at $30 per share and 240,000 shares of stock F at $10 per share, what is the portfolio turnover rate? (Round your answer to 2 decimal places.)
Problem 7-8 A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term bond fund, and the third is a money market fund that provides a safe return of 4%. The characteristics of the risky funds are as follows: Stock fund (S) Bond fund (B) Expected Return 23% 14 Standard Deviation The correlation between the fund returns is 0.12. Sharpe ratio 29% 17 What is the Sharpe ratio of the best feasible CAL? (Do not round intermediate calculations. Enter your answer as a decimal rounded to 4 places.) Check my work
F2
INV 1 6f You have decided to invest in three mutual funds: one in equities, one in long corporate and government bonds, and a money market fund invested in T-bills yielding 5%. Your estimate of the relevant parameters for the equities and bond funds are as follows: Expected Return Standard Deviation Equities .15 .30 Bonds .06 .09 The correlation between the fund returns is 0.12. Compare the portfolios in #4 and #5. Is this consistent with what you would expect when adding the T-bill money market fund as essentially the risk-free asset?
A 192.B is wrong
9
None
Problem 6-6 (Algo) Consider the following table: Scenario Probability Stock Fund Rate of Return Bond Fund Rate of Return Severe recession 0.10 -44% -11% Mild recession 0.20 -24% 17% Normal growth 0.40 29% 10% Boom 0.30 34% -7% Required: a. Calculate the values of mean return and variance for the stock fund. (Do not round intermediate calculations. Round "Mean return" value to 1 decimal place and "Variance" to 2 decimal places.) b. Calculate the value of the covariance between the stock and bond funds. (Negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.)
8f
The composition of the Fingroup Fund portfolio is as follows: Stock ABCD Shares 370,000 470,000 570,000 770,000 Price $ 35 40 10 15 Required: If during the year the portfolio manager sells all of the holdings of stock D and replaces it with 210,000 shares of stock E at $40 per share and 210,000 shares of stock F at $15 per share, what is the portfolio turnover rate? (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Turnover rate 29.92 %
8-21 capital of $500 million invested in five stocks: Stock Investment Stock's Beta Coefficient A $160 million 0.5 В 120 million 1.2 80 million 1.8 D 80 million 1.0 60 million 1.6 Kish's beta coefficient can be found as a weighted average of its stocks' betas. The risk-e rate is 6%, and you believe the following probability distribution for future market retums is realistic: TT Probability Market Return 0.1 - 28% 0.2 0.4 12 0.2 30 0.1 50 What is the equation for the security market line (SML)? (Hint: First, determine the expected market return.) Calculate Kish's required rate of return. c. Suppose Rick Kish, the president, receives a proposal from a company seeking new capital. The amount needed to take a position in the stock is $50 million, it has ar expected return of 15%, and its estimated beta is 1.5. Should Kish invest in the new company? At what expected rate of return should Kish be indifferent to purchasang the stock? а. b.

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