16. A large animal preserve has noticed that an albino panther is born unpredictably once a) What...
Suppose the portfolio of a large institutional investor ‘Animal’ has a beta of 1.25, and the standard deviation of the rate of return on its portfolio is 15 percent and its expected rate of return is 15 percent. The portfolio of another institutional investor ‘Beast’ has a beta of 0.75. The market portfolio may be expressed as a portfolio comprising the portfolios of Animal and Beast. Suppose there is a firm called ‘Cunning corporation’, whose stock’s beta is 2 and...
3. Suppose the portfolio of a large institutional investor 'Animal has a beta of 1.25, and the standard deviation of the rate of return on its portfolio is 15 percent and its expected rate of return is 15 percent. The portfolio of another institutional investor Beast' has a beta of 0.75. The market portfolio may be expressed as a portfolio comprising the portfolios of Animal and Beast. Suppose there is a firm called Cunning corporation', whose stock's beta is 2...
Problem 16. (pt) Lily owns a $1,000 par zero coupon bond that has six years of remaining maturity. She plans on selling the bond in one year and believes that the required yield next year will have the following probability distribution: Probability 0.1 0.2 0.2 0.3 0.1 Required Yield (%) 6.10 6.75 7.20 7.25 7.45 7.65 0.1 a. What is the expected required yield of the bond at the time of sale? b. What is the standard deviation of the...
The manager of the commercial mortgage department of a large bank has collected data during the past two years concerning the number of commercial mortgages approved per week. The results from these two years (104 weeks) are shown below. Number_Approved Frequency 0 12 1 26 2 34 3 16 4 8 5 6 6 1 7 1 Compute the expected number of mortgages approved per week. (Round to three decimal places as needed.) Compute the standard deviation. (Round to three...
I construction work on multistorey building is a potentially hazardous occupation. A building contractor who is building a skyscraper at a steady pace finds that in spite of a strong emphasis on safety measures, he has been experiencing accidents among his large group of steel workers; on the average, about l accident occurs every 6 months. ()Assuming that the occurrence of a specific accident is not influenced by any previous 4.4 Stee accident, find the probability that there will be...
Problem 14.13. Suppose that a stock price has an expected return of 16% per annum and a volatility of 30% per annum. When the stock price at the end of a certain day is $50, calculate the following: (a) The expected stock price at the end of the next day. (b) The standard deviation of the stock price at the end of the next day. (c) The 95% confidence limits for the stock price at the end of the next...
8.7. A stockbroker, Richard Smith, has just received a call from his most important client, Ann Hardy. Ann has $50,000 to invest and wants to use it to purchase two stocks. Stock 1 is a solid blue-chip security with a respectable growth potential and little risk involved. Stock 2 is much more speculative. It is being touted in two investment newsletters as having outstanding growth potential, but also is considered very risky. Ann would like a large return on her...
1. Jennifer purchased 200 shares of stock at $40 using her 70% margin account. Her maintenance margin is 40%. Jennifer has no othersecurities in her account. At what price per share will she receive a margin call? 2. An index consists of the following securities. What is the value-weighted index return? Shares Outstanding Beginning Ending Share Price $28.50 $31.00 Stock Morgan, Inc. 5,000 Taylor, Ltd. 7,500 $25.00 $28.00 A portfolio consisting of four stocks is expected to produce returns of...
The first 4 are answered, but I need help on the other 16. Respectfully, please don't answer if you can't help with all 20. QUESTION 1 101-010) Questions 1-10 are designed to review some statistical concepts as well as to help you understand the benefits from diversification. Assume that there are two assets (A and B) and there are four possible future scenarios. The four scenarios and their probabilities are shown in the following table. The last two columns show...
Question 46 Not yet answered At a factory that produces batteries, every 50th battery is taken from the production line in order to test its quality. This is an example of a Marked out of 1.00 P Flag question Select one: a. stratified random sample. b. systematic sample O c. simple random sample O d. convenience sample. e. voluntary response sample The delivery times for a courier company are uniformly distributed between 2 day and 4 days. What is the...