ff2 Question 6Consider the following information on two stocks:P(State)Stock AStock B10%25%-5%20%15%-5%10%25%10%5%BoomGrowthNormal 30%Slow20%Bust20%Calculate the correlation (A,B). (Enter percentages as decimals and round to 4 decimals)8%-5%

The correlation between stocks refers to the effect of the movement in the price of one stock on the…

Answered: Question 6 Consider the following…

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

8th Edition

ISBN:9781285065137

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter8: Risk And Rates Of Return

Section: Chapter Questions

Problem 4DQ: Select one of the four stocks listed in Question 3 by entering the companys ticker symbol on the...

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Question 4 Consider the following information on two stocks: Stock A Stock B P(State) 10% 25% -5% 15% -5% 10% 25% 8% 10% -5% 5% Boom Growth 20% Normal 30% 20% 20% Slow Bust Calculate the standard deviation of stock B. (Enter percentages as decimals and round to 4 decimals)
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).
Calculate arithmetic and geometric means for stock B: Year A B C D E 1 9.7% 10.7% 70.3% 13.0% 23.1% 2 1.1% 23.4% -54.0% 15.2% -16.0% 3 -38.9% -32.1% 40.2% -40.0% 0.8% 4 34.5% 26.3% 94.5% 57.2% 13.7% 5 14.6% 11.8% 7.3% -4.2% 41.3% 6 3.7% 1.9% 25.5% 3.9% 5.7% Geometric mean equals 10.0%; arithmetic mean equals 11.4% Arithmetic mean equals 7.0%; geometric mean equals 4.9% Arithmetic mean equals 7.5%; geometric mean equals 5.6% Geometric mean equals 6.5%; arithmetic mean equals 4.9%
2-3
Consider the following information on two stocks: P(State) Stock A Stock B Boom 20% 30% 20% Normal 50% 12% -5% Slow 15% 4% 8% Recession 15% -10% 10% $Investment Beta Asset A $35,000 1.45 Asset B $15,000 0.85 Q1. Calculate the weight of A in the portfolio. (Enter percentages as decimals and round to 4 decimals) Q2. Calculate the expected return on the portfolio. (Enter percentages as decimals and round to 4 decimals) Q3. Calculate the standard deviation of the portfolio. (Enter percentages as decimals and round to 4 decimals).
Compute for the Standard Deviation:
Year AT&T Stock Returns Market Index Returns 1 8 6 2 7 3 3 10 12 4 14 13 5 8 9 Compute the correlation coefficient between AT&T and the Market Index. Enter answer using 3 decimal places. Example 0.123
Year AT&T Stock Returns Market Index Returns 1 8 6 2 7 3 3 10 12 4 14 13 5 8 9 Compute the intercept of the characteristic line for AT&T. Enter answer using 3 decimal places. Example: 0.123
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.
1. stock EPS share price Growth rate A $0.30 $4.80 4% B $0.40 $5.50 6% C $0.50 $7.50 7% D $0.60 $8.00 5% Using the PEG ratio, rank the stocks in order of investment opportunity, the first having the best, the last having the worst. A. C,B,D,A B. A,D,B,C C. C,D,B,A D. B,D,C,A 2.Which of the following not true regarding financial statement A.Group financial statement be produced by each subsidiary as well as the parent entity B.Profit must be separated between members of the parent company and that of minority interest C.Minority interest share of equity represents that ‘part of a subsidiary’s equity not allocated to members of the parent company. D.Group financial statements must be produced by the parent entity only. E.None of the options provided.
Question 2 Consider a market consisting of three stocks with the following information: Si Stock S2 S3 Price $100 $200 $500 Return 1.04 1.08 1.10 Standard 0.1 0.2 0.3 deviation For any two stocks i and j, o, = cov(x,,x,)=0,0,P,- Here, Piz =0.1,Piz =-0.8, P3 =0.2. What are the mean return and variance of this portfolio?
Accounting Use the following information: Stock A B Good state 12% 17% Bad state 0% -1% Assume there is 60% probability that the good state occurs and 40% chance the bad state occurs. What is the expected return of a portfolio that is 9% invested in stock A and 1-9% invested in B? (Please use 5 decimal places, this should be written in percentage return, so an answer of 23.143% should be written at .23143)

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Question 6 Consider the following information on two stocks: P(State) Stock A Stock B 10% 25% -5% 15% -5% 10% 25% 8% 10% -5% 5% Boom Growth 20% Normal 30% Slow 20% Bust 20% Calculate the correlation (A,B). (Enter percentages as decimals and round to 4 decimals)