Homework Answers
Dear student, only one question is allowed at a time. I am answering the first question
Average of variables
= Sum of variables / Number of variables
=( 5% + 6% + 7% + 8% + 9%) / 5
= 7%
So, as per above calculations, option a is the correct option
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Use the table below to correctly complete the following sentence. A portfolio that has invested equal...
Use the table below to correctly complete the following sentence. A portfolio that has invested equal amounts of money in stocks C and 11% D, will have an expected return 6%, and a standard deviation Expected Return St Dev of Returns 4% Stock A Stock B Stock C Stock D 6% 6% 9% 13% 2% 10% Select one: a. Equal to; Equal to b. Equal to; Smaller than C. Smaller than; smaller than d. Smaller than; equal to
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You have prepared the following scenario analysis for the returns of the market index portfolio, M,...
You have prepared the following scenario analysis for the returns of the market index portfolio, M, and a stock. Assume that each scenario is equally likely. 1. Rate of return Scenario Bust Boom Market 10% 30% Stock 14% 26% a. Find the variance of the market and the stock, and beta of the stock. b. What is the expected rate of return on the stock and the market index? If the T-bill rate is 6 percent, what does the CAPM...
Consider the following information: Beta Portfolio Risk- free Market Expected Return 6 % 11.4 9.4 20...
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Suppose the yield on short-term government securities (perceived to be risk-free) is about 5%. Suppose also...
Suppose the yield on short-term government securities (perceived to be risk-free) is about 5%. Suppose also that the expected return required by the market for a portfolio with a beta of 1 is 15.0%. According to the capital asset pricing model: a. What is the expected return on the market portfolio? (Round your answer to 1 decimal place.) Expected rate of return ſ b. What would be the expected return on a zero-beta stock? Expected rate of return % Suppose...
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Suppose the rate of return on short-term government securities (perceived to be risk-free) is about 7%....
Suppose the rate of return on short-term government securities (perceived to be risk-free) is about 7%. Suppose also that the expected rate of return required by the market for a portfolio with a beta of 1 is 15%. According to the capital asset pricing model: a. What is the expected rate of return on the market portfolio? (Round your answer to 2 decimal places.) Expected rate of return b. What would be the expected rate of return on a stock...
Suppose the yield on short-term government securities (perceived to be risk-free) is about 5%. Suppose also...
Suppose the yield on short-term government securities (perceived to be risk-free) is about 5%. Suppose also that the expected return required by the market for a portfolio with a beta of 1 is 11.0%. According to the capital asset pricing model: a. What is the expected return on the market portfolio? b. What would be the expected return on a zero-beta stock? Suppose you consider buying a share of stock at a price of $80. The stock is expected to...
Use the table below to correctly complete the following sentence. A portfolio that has invested equal amounts of money in stocks C and 11% D, will have an expected return 6%, and a standard deviation Expected Return St Dev of Returns 4% Stock A Stock B Stock C Stock D 6% 6% 9% 13% 2% 10% Select one: a. Equal to; Equal to b. Equal to; Smaller than C. Smaller than; smaller than d. Smaller than; equal to
You have prepared the following scenario analysis for the returns of the market index portfolio, M, and a stock. Assume that each scenario is equally likely. 1. Rate of return Scenario Bust Boom Market 10% 30% Stock 14% 26% a. Find the variance of the market and the stock, and beta of the stock. b. What is the expected rate of return on the stock and the market index? If the T-bill rate is 6 percent, what does the CAPM...
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Suppose the rate of return on short-term government securities (perceived to be risk-free) is about 8%. Suppose also that the expected rate of return required by the market for a portfolio with a beta of 1 is 16%. According to the capital asset pricing model: a. What is the expected rate of return on the market portfolio? (Round your answer to 2 decimal places.) Expected rate of return b. What would be the expected rate of return on a stock...
Suppose the yield on short-term government securities (perceived to be risk-free) is about 5%. Suppose also that the expected return required by the market for a portfolio with a beta of 1 is 15.0%. According to the capital asset pricing model: a. What is the expected return on the market portfolio? (Round your answer to 1 decimal place.) Expected rate of return ſ b. What would be the expected return on a zero-beta stock? Expected rate of return % Suppose...
The realized returns for stock A and stock B from 2004-2009 are provided in the table below Year 2004 2005 2006 2007 2008 2009 Stock A -9% 21% 6% -4% 3% 10% Stock B 23% 9% 32% -1% -6% 27% (a) Calculate the expected returns (as percents) over the next year for the stocks assuming the average annual realized returns and past volatility from 2004-2009 are unbiased estimators of expected returns and future volatility. stock A 4.5 stock B 14...
Suppose the rate of return on short-term government securities (perceived to be risk-free) is about 7%. Suppose also that the expected rate of return required by the market for a portfolio with a beta of 1 is 15%. According to the capital asset pricing model: a. What is the expected rate of return on the market portfolio? (Round your answer to 2 decimal places.) Expected rate of return b. What would be the expected rate of return on a stock...
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