Homework Answers
Q.1
a. Mostly Systematic
b. Mostly Unsystematic
c. Mostly Systematic
d. Mostly Unsystematic
e. Mostly Unsystematic
f. Mostly Systematic
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Home Work #3 Question 1 Classify the following events as mostly systematic or mostly un-systematic. Is...
Classify the following events as mostly systematic or mostly un-systematic. Is the distinction clear in every...
Classify the following events as mostly systematic or mostly un-systematic. Is the distinction clear in every case? a. Short term interest rates decrease expectantly. b. The interest rate a company pays on its short term debt borrowing is increased by the bank. C. Oil prices expectantly decline. d. An oil tanker runs aground creating a large oil spill. e. A major manufacturing company loses a multimillion dollar product liability suit. f. The Supreme Court of Canada decision substantially broadens producer...
You have done your research for the following investments and your friend has provided their expectations...
You have done your research for the following investments and your friend has provided their expectations for the markets for next year. Probability of State of State of Stock Stock Economy Economy A B TSX Boom .30 30% -9% 18% Normal .40 16% 12% 10% Recession .30 -10% 20% -10% * Remember to show all of your work * a. Calculate the expected return for stock A. (2 marks) b. Calculate the expected return for stock B. (2 marks) C....
State of Economy Probability of State of Economy Stock A Stock B TSX Boom .30 30%...
State of Economy Probability of State of Economy Stock A Stock B TSX Boom .30 30% -9% 18% Normal .40 16% 12% 10% Recession .30 -10% 20% -10% Calculate the covariance and correlation of the returns for stock B and the TSX. Calculate the beta of Stock A. Calculate the beta of stock B. Calculate the beta for the TSX. Using an excel spreadsheet and the calculations you have done above, prepare a spreadsheet that provides the expected returns and...
no excel work. please provide formula. You have done your research for the following investments and...
no excel work. please provide formula.
You have done your research for the following investments and your friend has provided their expectations for the markets for next year. Probability of State of State of Stock Stock Economy Economy A B TSX Boom .30 30% -9% 18% Normal .40 16% 12% 10% Recession .30 -10% 20% -10% Remember to show all of your work * e. Calculate the risk for stock B. (2 marks) f. Calculate the risk for the TSX....
Home assignment 4 Consider following information Probability of the state of economy Rate of return if state occurs StockA StockB boom normal a. b. c. 0.2 0.8 0.4 0.2 0.05 Calculate the expected...
Home assignment 4 Consider following information Probability of the state of economy Rate of return if state occurs StockA StockB boom normal a. b. c. 0.2 0.8 0.4 0.2 0.05 Calculate the expected return of Calculate the variance and standard deviation of each stock. Calculate the covariance between stock A and B returns and the correlation coefficient. Calculate the expected return of the portfolio (Portfolio!) consisting 40% of stock A and 60% of stock B. Calculate the variance and standard...
no excel work, show formula please You have done your research for the following investments and...
no excel work, show formula please
You have done your research for the following investments and your friend has provided their expectations for the markets for next year. Probability of State of State of Stock Stock Economy Economy A B TSX Boom .30 30% -9% 18% Normal .40 16% 12% 10% Recession .30 -10% 20% -10% Remember to show all of your work * h. Calculate the covariance and correlation of the returns for stock A and the TSX. (2...
e. Calculate the risk for stock B. (2 marks) f. Calculate the risk for the TSX....
e. Calculate the risk for stock B. (2 marks) f. Calculate the risk for the TSX. (2 marks) g. Calculate the covariance and correlation of the returns for stock A and stock B. (2 marks) h. Calculate the covariance and correlation of the returns for stock A and the TSX. (2 marks) e. Calculate the risk for stock B. (2 marks) f. Calculate the risk for the TSX. (2 marks) g. Calculate the covariance and correlation of the returns for...
The risk free rate of return is 1.8% and the expected return on the market portfolio...
The risk free rate of return is 1.8% and the expected return on the market portfolio is 8.35%. Given the following possible returns for Lidar Limited and the S&P/TSX Composite Index(found in Table 1.1): a.Calculate the expected return for Lidar (illustrate your solution using MS Equation Editor). b.Calculate the expected return, variance and standard deviation for the S&P/TSX Composite Index(illustrate your solution using an embedded Excel Spreadsheet). c.Using an embedded Excel Spreadsheet, calculate the Covariance and Correlation Coefficient between Lidar’s...
Problem 3 (10 marks) Husky Manufacturing Inc. currently has $15,000,000 in bonds outstanding with a coupon...
Problem 3 (10 marks) Husky Manufacturing Inc. currently has $15,000,000 in bonds outstanding with a coupon rate of 5% that is paid semi-annually. The bonds will mature in 5 years are currently selling at a quoted price of 92. The company also has 30,000 shares of 7% preferred stock outstanding currently selling for $95 per share with a par value of $100. In addition, the company has 500,000 common shares outstanding selling for $60 per share and with a book...
I. Calculate the cost of each financing source for Keyboard, Inc. The tax rate is 40%;...
I. Calculate the cost of each financing source for Keyboard, Inc. The tax rate is 40%; ?.liesti. Debt Preferred Stock Common Stock Twelve-year bond, 6.75% annual coupon, current price of S960.81 Dividend $5.50, current price of S63.75 Beta of 1.45, excess market return of 5.63%, risk-free rate of 6.05% Currently, there are 121 million shares of common stock outstanding at $48 per share and four million shares of preferred stock outstanding. In addition, there is currently $956 million of debt...
Classify the following events as mostly systematic or mostly un-systematic. Is the distinction clear in every case? a. Short term interest rates decrease expectantly. b. The interest rate a company pays on its short term debt borrowing is increased by the bank. C. Oil prices expectantly decline. d. An oil tanker runs aground creating a large oil spill. e. A major manufacturing company loses a multimillion dollar product liability suit. f. The Supreme Court of Canada decision substantially broadens producer...
You have done your research for the following investments and your friend has provided their expectations for the markets for next year. Probability of State of State of Stock Stock Economy Economy A B TSX Boom .30 30% -9% 18% Normal .40 16% 12% 10% Recession .30 -10% 20% -10% * Remember to show all of your work * a. Calculate the expected return for stock A. (2 marks) b. Calculate the expected return for stock B. (2 marks) C....
no excel work. please provide formula.
You have done your research for the following investments and your friend has provided their expectations for the markets for next year. Probability of State of State of Stock Stock Economy Economy A B TSX Boom .30 30% -9% 18% Normal .40 16% 12% 10% Recession .30 -10% 20% -10% Remember to show all of your work * e. Calculate the risk for stock B. (2 marks) f. Calculate the risk for the TSX....
Home assignment 4 Consider following information Probability of the state of economy Rate of return if state occurs StockA StockB boom normal a. b. c. 0.2 0.8 0.4 0.2 0.05 Calculate the expected return of Calculate the variance and standard deviation of each stock. Calculate the covariance between stock A and B returns and the correlation coefficient. Calculate the expected return of the portfolio (Portfolio!) consisting 40% of stock A and 60% of stock B. Calculate the variance and standard...
no excel work, show formula please
You have done your research for the following investments and your friend has provided their expectations for the markets for next year. Probability of State of State of Stock Stock Economy Economy A B TSX Boom .30 30% -9% 18% Normal .40 16% 12% 10% Recession .30 -10% 20% -10% Remember to show all of your work * h. Calculate the covariance and correlation of the returns for stock A and the TSX. (2...
e. Calculate the risk for stock B. (2 marks) f. Calculate the risk for the TSX. (2 marks) g. Calculate the covariance and correlation of the returns for stock A and stock B. (2 marks) h. Calculate the covariance and correlation of the returns for stock A and the TSX. (2 marks) e. Calculate the risk for stock B. (2 marks) f. Calculate the risk for the TSX. (2 marks) g. Calculate the covariance and correlation of the returns for...
Problem 3 (10 marks) Husky Manufacturing Inc. currently has $15,000,000 in bonds outstanding with a coupon rate of 5% that is paid semi-annually. The bonds will mature in 5 years are currently selling at a quoted price of 92. The company also has 30,000 shares of 7% preferred stock outstanding currently selling for $95 per share with a par value of $100. In addition, the company has 500,000 common shares outstanding selling for $60 per share and with a book...
I. Calculate the cost of each financing source for Keyboard, Inc. The tax rate is 40%; ?.liesti. Debt Preferred Stock Common Stock Twelve-year bond, 6.75% annual coupon, current price of S960.81 Dividend $5.50, current price of S63.75 Beta of 1.45, excess market return of 5.63%, risk-free rate of 6.05% Currently, there are 121 million shares of common stock outstanding at $48 per share and four million shares of preferred stock outstanding. In addition, there is currently $956 million of debt...
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