PLEASE EXPLAIN EACH STEP OF EACH PART IN DETAIL. SHOW YOUR LOGIC. FAILURE TO DO SO WILL RESULT IN A NEGATIVE RATING
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PLEASE EXPLAIN EACH STEP OF EACH PART IN DETAIL. SHOW YOUR LOGIC. FAILURE TO DO SO WILL RESULT IN...
3. Assume many stocks in the market, two of which have the following characteristics: Expected Return...
3. Assume many stocks in the market, two of which have the following characteristics: Expected Return (%) 10 15 Standard Deviation (%) | 10 Stock A Stock B 20 Stocks A and B are perfectly negatively correlated (correlation = -1). What is the market risk-free rate? (hint: how can you construct a risk-free portfolio?)
(a) Suppose that there are many stocks in the security market and that the characteristics of...
(a) Suppose that there are many stocks in the security market and that the characteristics of Stocks A and B are given as follows Stock A B Expected Return Standard Deviation 10% 5% 15% 10% Correlation =-1 Suppose that it is possible to borrow at the risk-free rate, If. What must be the value of the risk-free rate? Explain. HINT!!! The stocks are perfectly negatively correlated. (b) Calculate the expected return and standard deviation of an equally weighted portfolio of...
Consider the following information for Stocks A, B, and C. The returns on the three stocks are positively correlated, bu...
Consider the following information for Stocks A, B, and C. The returns on the three stocks are positively correlated, but they are not perfectly correlated. Stock Expected Return Standard Deviation Beta A 9.55% 15% 0.9 B 10.45% 15% 1.1 C 12.70% 15% 1.6 Fund P has one-third of its funds invested in each of the three stocks. The risk-free rate is 5.5%, and the market is in equilibrium. a. What is the market risk premium? b. What is the beta...
CAPM, portfolio risk, and return Consider the following information for three stocks, Stocks A, B...
CAPM, portfolio risk, and return Consider the following information for three stocks, Stocks A, B, and C. The returns on the three stocks are positively correlated, but they are not perfectly correlated. (That is, each of the correlation coefficients is between 0 and 1.) Stock Standard Deviation 14% 14 14 Beta 0.9 1.3 1.7 Expected Return 9.60 % 11.42 13.24 Fund P has one-third of its funds invested in each of the three stocks. The risk-free rate is 5.5%, and...
please provide assistance with the following as well as step by step instruction question 4 your...
please provide assistance with the following as well as step by
step instruction
question 4
your portfolio is invested 30% each in A and C, and 40% in B
what us the expected return if the portfolio? Also what is the
variance of this portfolio? the standard deviation. pleas give
steps and calculation
3. Returns and Variances [LOI] Consider the following information: Rate of Return If Probability of State of State of State Occurs Economy Economy Stock Stock Stock A...
Show work in excel please An investor can design a risky portfolio based on two stocks,...
Show work in excel please An investor can design a risky portfolio based on two stocks, A and B. Stock A has an expected return of 19% and a standard deviation of return of 15.0%. Stock B has an expected return of 15% and a standard deviation of return of 6%. The correlation coefficient between the returns of A and B is 0.80. The risk-free rate of return is 11%. The proportion of the optimal risky portfolio that should be...
Financial Management Please show formula and calculation in detail for each questions Stock X has a...
Financial Management Please show formula and calculation in detail for each questions Stock X has a 10% expected return, a Beta coefficient of .9, and a 35% standard deviation of expected return. Stock Y has a 12.5% expected return, a bet coefficient of 2, and a 25% standard deviation. The risk free rate is 2% and the market risk premium is 5% Calculate each stock’s coefficient of variation. Which stock is riskier? Calculate each stock’s required rate of return. Calculate...
Consider the following information for three stocks, Stocks X, Y, and Z. The returns on the...
Consider the following information for three stocks, Stocks X, Y, and Z. The returns on the three stocks are positively correlated, but they are not perfectly correlated. (That is, each of the correlation coefficients is between 0 and 1.) Stock Expected Return Standard Deviation Beta X 10.32 % 15 % 0.9 Y 11.28 15 1.1 Z 13.68 15 1.6 Fund Q has one-third of its funds invested in each of the three stocks. The risk-free rate is 6%, and the...
Consider the following information for three stocks, A, B, and C. The stocks' returns are positively...
Consider the following information for three stocks, A, B, and C. The stocks' returns are positively but not perfectly positively correlated with one another, i.e., the correlations are all between O and 1 ExpectedStandard Stock Retum Deviation Beta 1.0 10% 1.0 1.4 10% B10% 12% 20% 12% Portfolio AB has half of its funds invested in Stock A and half in Stock B. Portfolio ABC has one third of its funds invested in each of the three stocks. The risk-free...
Consider the following information about three stocks: a. If your portfolio is invested 40 percent each...
Consider the following information about three stocks:
a. If your portfolio is invested 40 percent each in A and B and
20 percent in C, what is the portfolio expected return? The
variance? The standard deviation?
b.If the expected T-bill is is 3.80 percent, what is the
expected premium on the portfolio?
c. If the expected inflation rate is 3.50 percent, what are the
appropriate and exact expected real returns on the portfolio?What
are the approximate and exact expected real...
3. Assume many stocks in the market, two of which have the following characteristics: Expected Return (%) 10 15 Standard Deviation (%) | 10 Stock A Stock B 20 Stocks A and B are perfectly negatively correlated (correlation = -1). What is the market risk-free rate? (hint: how can you construct a risk-free portfolio?)
(a) Suppose that there are many stocks in the security market and that the characteristics of Stocks A and B are given as follows Stock A B Expected Return Standard Deviation 10% 5% 15% 10% Correlation =-1 Suppose that it is possible to borrow at the risk-free rate, If. What must be the value of the risk-free rate? Explain. HINT!!! The stocks are perfectly negatively correlated. (b) Calculate the expected return and standard deviation of an equally weighted portfolio of...
CAPM, portfolio risk, and return Consider the following information for three stocks, Stocks A, B, and C. The returns on the three stocks are positively correlated, but they are not perfectly correlated. (That is, each of the correlation coefficients is between 0 and 1.) Stock Standard Deviation 14% 14 14 Beta 0.9 1.3 1.7 Expected Return 9.60 % 11.42 13.24 Fund P has one-third of its funds invested in each of the three stocks. The risk-free rate is 5.5%, and...
please provide assistance with the following as well as step by
step instruction
question 4
your portfolio is invested 30% each in A and C, and 40% in B
what us the expected return if the portfolio? Also what is the
variance of this portfolio? the standard deviation. pleas give
steps and calculation
3. Returns and Variances [LOI] Consider the following information: Rate of Return If Probability of State of State of State Occurs Economy Economy Stock Stock Stock A...
Consider the following information for three stocks, A, B, and C. The stocks' returns are positively but not perfectly positively correlated with one another, i.e., the correlations are all between O and 1 ExpectedStandard Stock Retum Deviation Beta 1.0 10% 1.0 1.4 10% B10% 12% 20% 12% Portfolio AB has half of its funds invested in Stock A and half in Stock B. Portfolio ABC has one third of its funds invested in each of the three stocks. The risk-free...
Consider the following information about three stocks:
a. If your portfolio is invested 40 percent each in A and B and
20 percent in C, what is the portfolio expected return? The
variance? The standard deviation?
b.If the expected T-bill is is 3.80 percent, what is the
expected premium on the portfolio?
c. If the expected inflation rate is 3.50 percent, what are the
appropriate and exact expected real returns on the portfolio?What
are the approximate and exact expected real...
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