Use the following information to answer questions 3 - 8. The return for two companies, Alpha and Beta, depends on the strength of the economy. Economy Probability Alpha Return Beta Return strong 0.3 12% 5% normal 0.5 6% 8% weak 0.2 2% 10% What is the standard deviation of returns for the portfolio? O 2.25% O 5.575% 6.25% 5% 5% O 8.363% 6%

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For each of the cases shown in the following table, use the capital asset pricing model (CAPM) to find the required return and explain your answer. Case Risk-free rate Market return Beta (%) (%) 8 A 5 1.3 В 8. 13 0.9 C 9 12 -0.2 D 10 15 1.0 E 10 0.6

a. Given the following information, calculate the expected value for Firm C’s EPS. Datafor Firms A and B are as follows: E(EPSA) =$5.10, σA =$3.61, E(EPSB) =$4.20, and σB = $2.96. b. You are given that σC = $4.11. Discuss the relative riskiness of the three firms’ earnings.

3. You have worked with your client and put together an investment portfolio based on the client's preferences for risk. The portfolio will be divided among several asset classes defined below. Asset Class Allocation Expected Return Standard Deviation of Returns 10 Year T-Bonds 37% 4.13% 0.00% International Bonds (Private Corporate) 12% 6.32% 34.23% Rusell 2000 ETF 41% 6.70% 12.32% FTSE 100 ETF 10% 32.10% 21.30% 100% a. What is the expected return for this portfolio? Provide the result as x.xx%. b. What is the expected return for the portfolio if you decide not to invest in treasury bonds? Provide the result as x.xx%. c. What asset class would you eliminate to maximize expected return? Explain why.

The returns of Railroad United (RIU) are listed below, along with the returns on Major Application of Technology (MAT). State of economy Prob. of state of economy ▸ RIU Economy 1 Economy 2 Economy 3 Economy 4 1. What is the expected return of a portfolio that is 50% in stock RIU and 50% in MAT? 15% 25% 30% 30% MAT -14% 16% 22% 7% -9% 11% 15% 5% 2. What is the standard deviation of the portfolio that is 50% in stock RIU and 50% in MAT?

What the required return for the market? ? Solve question general Accounting

The returns on AA Berhad and BB Berhad are given below, State of Economy Probability of Return (%) AA Return (%) BB occurring Berhad Berhad 1 0.30 6 -15 0.50 10 18 3 0.20 17 40 Calculate: a) Expected return E(R) for i) АА Beфad ii) ВВ Behad b) Standard deviation for i) AA Berhad ii) ВВ ВBehad c) Discuss any FOUR (4) benefits of diversification by referring to AA and BB Berhad.

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Consider the following returns and states of the economy for TZ.Com.: EconomyProbabilityReturn 2% Weak 40% Normal 50% 8% Strong 10% 15% What is the standard deviation of TZ's returns? 4.05% 4.85% 4.49% 4.99% 4.60%