Use the table for the question(s) below. Consider the following expected returns, volatilities, and correlations: Stock...
Use the table for the question(s) below.
Consider the following expected returns, volatilities, and
correlations:
| Stock | Expected Return | Standard Deviation | Correlation with Duke Energy | Correlation with Microsoft | Correlation with Wal-Mart |
| Duke Energy | 14% | 6% | 1.0 | -1.0 | 0.0 |
| Microsoft | 44% | 24% | -1.0 | 1.0 | 0.7 |
| Wal-Mart | 23% | 14% | 0.0 | 0.7 | 1.0 |
The expected return of a portfolio that consists of a long position
of $10,000 in Wal-Mart and a short position of $2000 in Microsoft
is closest to:
|
a.12% |
||
|
b.27% |
||
|
c.18% |
||
|
d.21% |
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Use the table for the question(s) below.
Consider the following expected returns, volatilities, and
correlations:
Stock...
Use the table for the question(s) below. Consider the following expected returns, volatilities, and correlations: Stock...
Use the table for the question(s) below. Consider the following expected returns, volatilities, and correlations: Stock Expected Return Standard Deviation Correlation with Duke Energy Correlation with Microsoft Correlation with Wal-Mart Duke Energy 14% 6% 1.0 -1.0 0.0 Microsoft 44% 24% -1.0 1.0 0.7 Wal-Mart 23% 14% 0.0 0.7 1.0 The volatility of a portfolio that is equally invested in Duke Energy and Microsoft is closest to:
efficient fronteir and portfolio choice
Problem 5 (Efficient frontier and portfolio choice)Consider the following expected returns, volatilities, and correlations:StockExpected returnStandard deviationCorrelation with Duke EnergyCorrelation with MicrosoftCorrelation with Wal-MartDuke Energy14%6%1-10Microsoft44%24%-110.7Wal-Mart23%14%00.71(a) Consider a portfolio consisting of only Duke Energy and Microsoft. The percentage of your investment (portfolio weights) that you would place in Microsoftstock to achieve a risk-free investment should be closest to:(1) 15%(2) 4%(3) 23%(4) 10%(b) The expected return of a portfolio that is equally-invested in Duke Energy and Microsoft is closest to:(1) 28%(2) 29%(3) 24%(4)...
Please show work on excel with equations. Thank you 16 #5 Expected 17 Stock 18 Correlation...
Please show work on excel with equations. Thank you
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Suppose Johnson & Johnson and Walgreens Boots Alliance have expected returns and volatilities shown below, with a c...
Suppose Johnson & Johnson and Walgreens Boots Alliance have expected returns and volatilities shown below, with a correlation of 21%. Expected Return Standard Deviation Johnson & Johnson 6.90% 17.90% Walgreens Boots Alliance 9.60% 21.60% Calculate the expected return and the volatility of a portfolio that is equally invested in both stocks. For the portfolio in (a), if the correlation between two stocks were to increase, would the expected return of the portfolio rise or fall? Would the volatility of the...
Suppose Johnson & Johnson and the Walgreen Company have the expected returns and volatilities shown below,...
Suppose Johnson & Johnson and the Walgreen Company have the expected returns and volatilities shown below, with a correlation of 21%. E[R] SD[R] Johnson & Johnson 5% 14% Walgreen Company 10% 20% Consider a portfolio that is equally invested in Johnson & Johnson's and Walgreen's stock (a) Calculate the expected return as a percent. % (b) Calculate the volatility (standard deviation) of returns as a percent. (Round your answer to two decimal places.) %
The realized returns for stock A and stock B from 2004-2009 are provided in the table...
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...
please work all parts. 2. Stock A has expected return of 14% and volatility 30%. Stock...
please work all parts.
2. Stock A has expected return of 14% and volatility 30%. Stock B has expected return of 8% and volatility 19%. The correlation between two stocks is -0.2. The risk free interest rate is 4% (a) Find the expected returns, volatilities, and Sharpe ratios of portfolios that maintain 100.0% investment in Stock A and 100(1-x)% in Stock B, where x is given in the following table. Volatility Expected return Sharpe ratio 0.8 0.9 1.0 (b) How...
Use the following information to answer the question(s) below. Portfolio Correlation w/ Firm Weight Volatility Market...
Use the following information to answer the question(s) below. Portfolio Correlation w/ Firm Weight Volatility Market Portfolio Taggart Transcontinental 0.25 14% 0.7 Wyatt oil 0.35 18% 0.6 Rearden Metal 0.40 15% 0.5 The volatility of the market portfolio is 10%, the expected return on the market is 12%, and the risk-free rate of interest is 4%. estion The expected return for Rearden Metal is closest to: Select one: A. 11.8% B. 11.4% C. 10.0% D. 12.0%
Use the table for the question(s) below. Consider the following three individuals portfolios consisting of investments...
Use the table for the question(s) below. Consider the following three individuals portfolios consisting of investments in four stocks: Stock Beta Peter's Investment Paul's Investment Mary's Investment Eenie 1.3 2500 5000 10,000 Meenie 1.0 2500 5000 10,000 Minie 0.8 2500 5000 minus−5000 Moe −0.5 2500 minus−5000 minus−5000 Assuming that the risk−free rate is 4% and the expected return on the market is 12%, then required return on Peter's Portfolio is closest to: A.8% B.12% C.9% D.10%
Problem 7-13 Consider the data contained in the table below, which lists 30 monthly excess returns...
Problem 7-13 Consider the data contained in the table below, which lists 30 monthly excess returns to two different actively managed stock portfolios (A and B) and three different common risk factors (1, 2, and 3). (Note: You may find it useful to use a computer spreadsheet program such as Microsoft Excel to calculate your answers.) Period Portfolio A Portfolio B Factor 1 Factor 2 Factor 3 1 1.09 % 0.00 % 0.03 % -0.94 % -1.68 % 2 7.50...
Please show work on excel with equations. Thank you
16 #5 Expected 17 Stock 18 Correlation with Standard Correlation with Correlation with Duke Energy Return Deviation Microsoft Wal-Mart 19 Duke Energy 14% 6% -1 20 Microsoft 44% 24% -1 0.7 21 Wal-Mart 23% 14% 0.7 22 23 (a) Usin above table, calculate the volatility of a portfolio that is equally invested in Duke Energy and Microsoft. 24 (b) Usin above table, calculate the volatility of a portfolio that is equally...
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...
please work all parts.
2. Stock A has expected return of 14% and volatility 30%. Stock B has expected return of 8% and volatility 19%. The correlation between two stocks is -0.2. The risk free interest rate is 4% (a) Find the expected returns, volatilities, and Sharpe ratios of portfolios that maintain 100.0% investment in Stock A and 100(1-x)% in Stock B, where x is given in the following table. Volatility Expected return Sharpe ratio 0.8 0.9 1.0 (b) How...
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