3,11,18 Exhibit 18.8 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM An analyst is considering investing in fun...
o o Exhibit 18.2 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM o o The portfolios identified below are being considered for investment. Assume that during the period under consideration, R = .04. o Portfolio Beta Return 0.18 o o o 0.21 0.06 0.10 0.03 0.07 0.13 0.16 Refer to Exhibit 18.2. Using the Sharpe Measure, which portfolio performed best a. W ob. Ү o o o o o o o е Соооо О сах O d. 2 e. Two...
An analyst gathered the following information about a portfolio's performance over the past ten years: Mean annual return: 11.8% Standard deviation of annual returns: 15.7% Portfolio Beta:1.2 If the mean return on the risk-free asset over the same period was 5.0%, the Sharpe ratio for the portfolio is closest to: Sharpe ratio A 0.23 B 0.36 C 0.43
4. We are given the following information: rved return Beta Residual Variance 0.15 Obser 1.3 0.00 0.04 Portfolio 1 Portfolio 2 0.09 0.9 ] 0.10 The standard deviation of the market is 0.3. YF-005 and EYM (a) Compute the Jensen Index for portfolios 1 and 2. Interpret the results. (b) Compute the Treynor Index for portfolios 1 and 2. Interpret the results. (c) Compute the Sharpe Index for the market portfolio (d) Compute the Sharpe Index for portfolios 1 and...
Exhibit 14.4 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM Consider the following information on put and call options for Citigroup Strike Price Put Price Call Price $32.50 $2.85 $1.65 Refer to Exhibit 16.4. Calculate the payoffs of a short straddle at a stock price at expiration of $20 and a stock price at expiration of $45. a. $21.65, $34.15 b. $6.35, $18.85 c. $8, $8 d. $29.65, $42.15 e. -$8, -$8
Exhibit 12.2 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) XLR Corporation just issued a $1,000 par value bond with a 7 percent yield to maturity, twenty years to maturity, with an 8 percent semi-annual coupon rate. 37. Refer to Exhibit 12.2. If market interest rates rise to 10 percent, what will the price of the XLR Corporate bond be in three years? a. $832.89 b. $838.07 c. $1097.63 d. $1,102.85 e. $1,191.43
Questions A1-A2 are based on the following information You are considering two projects that are independent. Your firm has access to $70,000 only. Cost of capital for both projects is 12%. Project A costs $40,000 and generates cash flows of $9,600 per year for 15 years. Project B costs $60,000 and generates cash flows of $12,000 per year for 15 years. A1. What is the MIRR for Project A? (a) 16.7% (b) 14.34% (c) 12.87% (d) 15.73% 21.98% A2. What...
Question text Use the following information to answer Questions 6 and 7: •An analyst gathered the following information regarding Alturius Inc: •Current market price per share = $29.48 •Current year EPS = $3.18 •Current year dividend per share = $1.272 •Required rate of return on equity = 12% Dividends are expected to grow at a rate of 6.5% forever. Question: The company's justified leading P/E ratio is closest to: Select one: a. 7.75 b. 7.27 c. 10.91 Question text Based...
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...
You are considering investing in three stocks with the following expected returns: Stock A: 7% Stock B: 12% Stock C: 20%. What is the expected return on the portfolio if an equal amount is invested in each stock? What would be the expected return if 50 percent of your funds is invested in stock A and the remaining funds are split evenly between stocks B and C?
Use the following information to answer Questions 3 to 5: An analyst gathered the following information regarding Pluto Inc: •Expected EPS for 2011 = $4.25 •Retention rate = 0.4 •Required return = 11% •Current stock price = $54.85 Dividends are paid out at the end of the year and are expected to grow at a rate of 5.5% forever. Question: The intrinsic value of the stock at the end of 2010 is closest to: Select one: a. $46.36 b. $77.27...