2. Answer the following questions: a. Calculate the variability (standard deviation) of the stock returns of California REIT and Brown Group during the past 2 years. How variable are they compared with Vanguard Index 500 Trust? Which stock appears to be riskless? b. Suppose Beta's position had been 99% of equity funds invested in the index fund and 1% in the individual stock. Calculate the variability of this portfolio using each stock. How does each stock affect the variability of the equity investment, and which stock is riskless? Explain how this makes sense in view of your answer to Question #1 above. c. Compute the "beta" for each stock using the Index returns as the Market returns. How does this relate to the situation described in Question #2 above? d. How might the expected return for each stock relate to its riskiness? e. How much will Sarah require / expect to earn on each stock given its riskiness in order to hold it? (What does each investment do to her overall risk?)
Answer - data is insufficient to answer and there are few parts are missing in the question.
please provide the data to answer the question of beta and related terms.
2. Answer the following questions: a. Calculate the variability (standard deviation) of the stock returns of...
calculate the standard deviation of the returns. 2. Stock A has the following returns for various states of the economy: State of the Economy Recession Below Average Average Above Average Boom Probability 9% 16% 51% 14% 10% Stock A's Return -72% -15% 16% 35% 85%
calculate the standard deviation of the returns 3. Stock A has the following returns for various states of the economy State of the Economy Probability Recession 10% Below Average 20% Average 40% Above Average 20% Boom 10% Stock A's Return -30% -2% 10% 18% 40%
calculate the standard deviation of the returns 4. Stock A has the following returns for various states of the economy State of the Economy Recession Below Average Average Above Average Boom Probability 9% 16% 51% 14% Stock A's Return -72% -15% 16% 35% 85% 10%
Calculate the variance and standard deviation of each stock Calculate portfolio returns from each month Here are the returns on two stocks. Digital Cheese Executive Fruit January February March +18 +6 -2 +2 +4 +5 April Мay +15 +6 -3 +2 June +3 +7 July August -1 -2 -7 -1 Required: a-1. Calculate the variance and standard deviation of each stock. a-2. Which stock is riskier if held on its own? b. Now calculate the returns in each month of...
calculate the standard deviation 1. Stock A has the following returns for various states of the economy: State of the Economy Recession Below Average Average Above Average Boom Probability 10% 20% 40% 20% 10% Stock A's Return -30% -2% 10% 18% 40%
Stocks A and B have the following historical returns: 1. Calculate the arithmetic average return for each stock. 2. Calculate the standard deviation of returns for each stock. 3. Assume that 50% of your portfolio is invested in Stock A and the rest is invested in Stock B. Based on this information, what is your portfolio’s realized return? 4. If 50% of your portfolio is invested in Stock A and the rest is invested in Stock B, what is the...
6. Consider the following information for Stocks 1 and 2: Expected Standard Stock Return Deviation 1 20% 40% 2 12% 20% NE a. The correlation between the returns of these two stocks is 0.3. How will you divide your money between Stocks 1 and 2 if your aim is to achieve a portfolio with an expected return of 18% p.a.? That is, what are the weights assigned to each stock? Also take note of the risk (i.e., standard deviation) of...
The following table provides the expected return and the standard deviation of returns for srocks and gold. Your client is currently holding a portfolio of stocks and he is considering whether he should replace half of the stocks with gold. . Question 1 Part a) The following table provides the expected return and the standard deviation of returns for stocks and gold. Your client is currently holding a portfolio of stocks and he is considering whether he should replace haif...
NB: KINDLY ASSIST TO TACKLE THE OTHER QUESTIONS THAT I AM NOT ABLE TO WORK ON THEM Assume that you recently graduated with a major in finance, and you just landed a job in the trust department of a large regional bank. Your first assignment is to invest KES 10 Million from an estate for which the bank is a trustee. Because the estate is expected to be distributed to the heirs in about one year, you have been instructed...
Dropdown options: 1-risk/return 2-equal to/greater or less than 3-self contained/stand-alone 4-variance/standard deviation 5-variance/beta coefficient 6-diversifiable/non-diversiable 7-is/ is not 8-diversifiable/non-diversifiable 9-random/non random 10-decreasing/increasing 11-2000+/500 12-reduces/increases 13-systematic of market/unsystematic or company-specific 14-diversifiable/non diversifiable 1. Basic concepts - Risk and return Professor Isadore (Izzy) Invest-a-Lot retired two years ago from Exceptional College, a small liberal arts college in North Carolina after teaching corporate finance and investment theory for 35 years. Yesterday, Izzy appear on EC LIVE, a television show produced for the students,...