(Expected rate of return and risk) Syntex, Inc. is considering an investment in one of two common stocks. Given the information that follows, which investment is better, based on the risk (as measured by the standard deviation) and return? Common Stock A Probability 0.25 0,50 0.25 Probability 0.10 0.40 0.40 0.10 (Click on the icon in order to copy its contents into a apreadsheet) Common Stock B Return 10% 17% 18% Return -4% 7% 13% 20% G a. Given the information in the table, the expected rate of return for stock A is 15.5% (Round to two decimal places) The standard deviation of stock A is (Round to two decimal places.)

Assume you wish to evaluate the risk and return behaviors associated with various combinations of two stocks, Alpha Software and Beta Electronics, under three possible degrees of correlation: perfect positive, uncorrelated, and perfect negative. The average return and standard deviation for each stock appears here: a. If the returns of assets Alpha and Beta are perfectly positively correlated (correlation coefficient = + 1), over what range would the average return on portfolios of these stocks vary? In other words, what is the highest and lowest average return that different combinations of these stocks could achieve? What is the minimum and maximum standard deviation that portfolios Alpha and Beta could achieve? b. If the returns of assets Alpha and Beta are uncorrelated (correlation coefficient = 0), over what range would the average return on portfolios of these stocks vary? What is the standard deviation of a portfolio that invests 75% in Alpha and 25% in Beta? How does this…

2. Suppose that three stocks (A, B, and C) and two common systematic risk factors (1 and 2) have the following relationship: E(RA) = (0.80) F1 + (0.90) F2 E(RB)= (-0.20) F1 + (1.30) F2 E(RC)= (1.80) F1 + (0.50) F2 a. Compute the expected returns if F1 = 4% and F2 = 5% b. Assuming that all three stocks are currently priced at $35 and will not pay a dividend over the next year, compute the expected prices a year from now c. Now, suppose you "know" that in one year the actual prices of stocks A, B, and C will be $37.20, $37.80, and $38.50. How can you best take advantage of what you consider to be a market mispricing? d. How will the current prices adjust?

Please solve step by step for clarity, thank you!

Syntex, Inc. is considering an investment in one of two common stocks.  Given the information that​ follows, which investment is​ better, based on the risk​ (as measured by the standard​ deviation) and​ return?   Common Stock A   Common Stock B     Probability Return Probability Return   0.25 13​% 0.25 −7​%   0.50 14​% 0.25 7​%   0.25 18​% 0.25 16​%       0.25 23​%   ​(Click on the icon    in order to copy its contents into a spreadsheet.​)           Question content area bottom Part 1 a.  Given the information in the​ table, the expected rate of return for stock A is   enter your response here ​%.  ​(Round to two decimal​ places.) Part 2 The standard deviation of stock A is   enter your response here ​%.  ​(Round to two decimal​ places.) Part 3 b.  The expected rate of return for stock B is   enter your response here ​%.  ​(Round to two decimal​ places.) Part 4 The standard deviation for stock B is   enter…

Stock A has expected return of 15% and standard deviation (s.d.) 20%. Stock B has expected return 20% and s.d. 15%. The two stocks have a correlation coefficient of 0.5.   1.Note that Stock A has greater risk (s.d.) that Stock B, but a lower expected return. Explain how is this possible in a world where returns on assets are as predicted by the CAPM. 2. Determine the expected return and the s.d. of portfolio P1, composed by investing 30% in stock A and 70% in stock B. 3. Consider stock C that has expected return 15% and s.d. 15%. Stock C is uncorrelated with either stock A and stock B. Determine the expected return and s.d. of portfolio P2 made by investing 50% in stock C and 50% in portfolio P1.

I need help with this et exercise entirely please.

Syntex, Inc. is considering an investment in one of two common stocks. Given the information that​ follows, which investment is​ better, based on the risk​ (as measured by the standard​ deviation) and​ return?   Common Stock A              Common Stock B              Probability Return Probability Return 0.35 13​% 0.25 −7​%   0.30 17​% 0.25 8​%   0.35 21​% 0.25 15​%       0.25 23​%   ​(Click on the icon    in order to copy its contents into a spreadsheet.​)       Question content area bottom Part 1 a.  Given the information in the​ table, the expected rate of return for stock A is enter your response here​%. ​(Round to two decimal​ places.)

Consider the two (excess return) index model regression results for A and B.  RA= 0.9% + 1.1RM , R-square = 0.590, and Residual Standard Deviation = 11% RB= -1.4% + 0.6RM, R-square = 0.456, and Residual Standard Deviation = 9.2% Which stock has more firm-specific risk, market risk, and greater fraction of return variability for market movement? Also, if rf were constant at 4.4% and the regression had been run using total rather than excess returns, what would have been the regression intercept for stock A (write as percentage, rounded to 2 decimal places)?