Question oneSuppose you have the following information from Muscat stock market StockShare outstandingBase day Closing priceSecond day closing priceSalalah company1832.8Dhofar power company262.83.1Oman company104.12.1Dhofar bank2831.8Calculate1. Price weighted index2. Value weighted index

1. Price Weighted Index = Sum of 2nd dy Closing price/Sum of Base day Closing price PWI = 9.8/12.9…

Answered: Stock Share outstanding Base day…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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SECURITY MARKET LINE You are given the following historical data on market returns, r, and the returns on Stocks A and B, r, and rp: 8A-2 M' A Year 1 29.00% 29.00% 20.00% 2 15.20 15.20 13.10 (10.00) (10.00) 0.50 4 3.30 3.30 7.15 5 23.00 23.00 17.00 31.70 31.70 21.35
Review the following market information: Current Stock Market Return 11.25% Current T-Bill Price $979.43 Historic T-Bill Average Return 2.80% Historic Stock Market Average Return 8.10% Stock Beta 1.23 What is the required return (rounded to two places)?
Please stepwise all parts
Compute for the Standard Deviation:
Consider the following information: Rate of return State of Economy Probability Stock A Stock B Recession 0.30 -40% 6% Normal 0.50 18% 4% Воom 0.20 142% 2% [Note: take full decimal places in the middle steps and round your FINAL answer to 2 decimal places (i.e. S1.23 or 1.23%)] (a) Calculate the expected return for the two Stocks A and B respectively. (in %) (b) Calculate the standard deviation for the two Stocks A and B respectively. (in %) (c) If you have $2 million to invest in a stock portfolio and your goal is to create a portfolio with an expected return of 16.92%, how much money will you invest in Stock A and Stock B respectively? (d) Based on your answer in part (c), calculate the standard deviation for the portfolio. (in %) (e) If enough stocks (i.e. 100 randomly selected stocks) had been included in the portfolio, what happen to the standard deviation for the portfolio? Explain. [within 100 words]
Question 1 • An analyst has gathered P/E information on two stocks, Firm A and Form B. Market Data on Firm A and Firm B Trailing P/E Leading P/E 5-year Growth Rate Beta 10.0 Firm A 8.7 11.0% 1.3 Firm B 9.0% 14.0 12.7 1.4 11.0% Peer median 13.3 12.1 1.3 • Evaluate the value and P/E of each stock based on the method of comparables.
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Question 3 The table below provides the end-of-year share prices (in GB pence) for Centrica plc and National Express Group plc the end-of-year values for the FTSE 100 Index, which is a proxy for the market portfolio, M. YEAR Centrica plc National Express Group plc Market Portfolio, M 2002 224.7 151.5 199.5 205.8 292.6 187.4 3940.4 2003 4476.9 4814.3 5618.8 6220.8 6456.9 4434.2 5412.9 2004 337.7 2005 2006 2007 2008 235.5 327.6 293.0 256.1 465.2 451.7 545.4 607.1 168.8 207.1 243.6 2009 2010 2011 2012 2013 268.1 317.8 291.6 348.3 309.6 5899.9 5572.3 5897.8 6749.1 216.1 206.5 290.9 2014 6566.1 6242.3 7142.8 2015 292.5 254.9 2016 204.0 301.9 223.5 133.1 136.1 2017 337.8 7687.8 2018 366.2 393.9 6728.1 7542.4 2019 Source: Yahoo Finance. Required: (a) Calculate the systematic risk (82 x o, the non-systematic risk (o2) – (8? x o?) and the total risk (of) of the equity shares of Centrica and National Express Group. (b) Which company's returns are better explained by the market's returns? (c)…
1 2 A Investment 3 Broad Stock Market Index 4 Small Capitalization Market Index 5 Local Casino 6 7 8 9 10 Yearly Daily Monthly Time Period B Probability of Price Increase, Daily Time 0.5030 0.5005 0.4900 1 30 365 C Probability of Price Decrease, Daily Expected Return: Daily 15 (Use cells A3 to D10 from the given information to complete this question.) 16 17 Stock Name 18 Broad Stock Market Index 19 Small Capitalization Market Index 20 Local Casino 21 22 0.4970 0.4995 0.5100 D Expected Return: Monthly Size of Price Change 0.0550 0.1050 0.0500 E 11 12 Required: 13 Using the information in the tables above, please calculate the expected return of each investment over one day, one month, and one year. 14 Expected Return Yearly F பட G

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Stock	Share outstanding	Base day Closing price	Second day closing price
Salalah company	18	3	2.8
Dhofar power company	26	2.8	3.1
Oman company	10	4.1	2.1
Dhofar bank	28	3	1.8

Stock Share outstanding Base day Closing price Second day closing price Salalah company 18 3 2.8 Dhofar power company 26 2.8 3.