1. You have $100,000 invested in this portfolio. $55,000 is invested in IBM: Probability of State of Economy IBM TWTR -0.17 Recession 0.15 0.05 Normal 0.65 0.08 0.12 Boom 0.20 0.13 0.29 What is the expected return and standard deviation of each stock? What is the portfolio expected return and standard deviation? You are considering adding another stock, DNKN, with a beta of 1.3 to the portfolio. The market risk premium is 8% and the risk-free rate is 2.5%. What is the expected return of this asset? а. b.

Q: a) The expected return of Stock A  b) The expected return of Stock B  c) The expected return of…

A: The expected return on the portfolio is the weighted average of the return generated from the…

Q: 2. Suppose that three stocks (A, B, and C) and two common systematic risk factors (1 and 2) have the…

A: Expected Return on stock :The expected return is the profit or loss that an investor expects or…

Q: he financial controller is considering the use of the Capital Asset Pricing Model as a surrogate…

A: CAPM: Capital asset pricing model Under this model ris free return is used along with Beta and…

Q: Bell Weather, Inc. has a beta of 1.25. The return on the market portfolio is 12.5%, and the…

A: We require to calculate the Bell Weather Inc stock's required rate of return using CAPM from the…

Q: You have $100,000 invested in this portfolio. $55,000 is invested in IBM: Probability of State of…

A: according to capital asset pricing model: expected return = risk free rate+beta ×market risk premium

Q: Blue Bell stock is expected to return 8.4 percent in a boom, 8.9 percent in a normal economy, and…

A: Standard deviation refers to the variation or dispersion in the values of a data set. Standard…

Q: Coca Cola                                            Walmart Probability         Return…

A: The expected return of the portfolio can be calculated by multiplying the weights of the different…

Q: You are considering an investment in MBC Group's stock, which is expected to pay a dividend of $3.96…

A: The question can be answered by determining the expected return for the stock using the capital…

Q: You have $8600 to invest. You decide to invest $17,000 in Google and short sell $8400 worth of…

A:

Q: You expect the risk-free rate (RFR) to be 3 percent and the market return to be 10 percent. You also…

A: Using CAPM

Q: Expected dividend yield 5%

A: Ans.   D.stock X pays higher dividend per share than stock y

Q: Calculate the portfolio’s expected return and standard deviation if you invest 25% in Stock A, 25%…

A: Calculation of expected returns:  Stock A   A B C D E   Probability (P) Return on stock (RS)…

Q: beta

A: Formula to calculate portfolio beta is: Portfolio beta = wA*Beta A + wB*Beta B +......+wN*Beta N…

Q: Suppose​ Pepsico's stock has a beta of 0.51. If the​ risk-free rate is 3% and the expected return of…

A: To determine market behaviour, the Capital Asset Pricing Model (CAPM) is applied. The model is based…

Q: Porter Plumbing's stock had a required return of 11.75% last year, when the risk-free rate was 5.50%…

A: Required Return = Risk free Rate + beta * (Market Risk Premium)

Q: Given the following information, what is the expected return on a portfolio that is invested 30…

A: A combination of different types of securities for the investment is term as the portfolio.

Q: Historical nominal returns for Coca-Cola have been 8% and -20%. The nominal returns for the market…

A: “Hey, since there are multiple questions posted, we will answer first question. If you want any…

Q: State of Economy Probability of State of Economy Rate of Return if State Occurs Stock A Stock B…

A: d) Expected return of the portfolio:(Ba×Pa)+(Bb×Pb)Where,Ba=Beta of stock A Bb=Beta of stock…

Q: Porter Plumbing's stock had a required return of 12.75% last year, when the risk-free rate was 5.50%…

A: Required Return = Risk free rate + beta * market risk premium 12.75% = 5.50% + beta * 4.75% (12.75%…

Q: You have just inherited DKK 20,000, which you are going to invest in stocks. You are considering two…

A: The expected return and the standard deviation of a portfolio are measures to find out the…

Q: You have been given this probability distribution for the holding-period return for KMP stock: HPR…

A: economy probability HPR boom 0.3 18% normal 0.5 12% recession 0.2 -5%

Q: Calculate the expected (required) return for each of the following stocks when the risk-free rate is…

A: With the given information, we can determine the expected return as:

Q: Tiger Corp's stock had a required return of 11.75% last year, when the risk-free rate was 4.50% and…

A: The rate of return is the amount that the investors are expected against the amount invested.…

Q: 22 OLG stock has a beta of 0.98 and an expected return of 10.52 percent. The risk-free rate of…

A: The capital asset pricing model is used for pricing securities and calculating their expected…

Q: Given the following information, what is the expected return on a portfolio that is invested 30…

A: expected return of portfolio = ERA * WA + ERB * WB +ERC * WC

Q: Assume you have created a 2-stock portfolio by investing $30,000 in stock X with a beta of 0.8, and…

A: Expected Return and Standard deviation of each stock is calculated using below formula For…

Q: - Suppose your expectations regarding the stock price are as follows: Selling price = 100 T-bills =…

A: Expected rate of return is the profit or loss on the investor that is assumed to be anticipated by…

Q: As a portfolio manager for Bank of America Merrill Lynch, you are managing a portfolio of $33.90…

A: The Value at Risk: The value of risk attempts to measure the maximum loss a portfolio can take for a…

Q: Two stocks each pay a $1 dividend that is growing annually at 4 percent. Stock A's beta = 1.3; stock…

A: We need to use constant growth model to calculate stock price Stock price(P0) =D0(1+g)rs-g where D0…

Q: State of Economy Probability of State of Economy Rate of Return if State Occurs Stock A Stock B…

A: we will only answer the first three subparts. For the remaining subparts, kindly resubmit the…

Q: 2-9 We have the following information on a portfolio consisting of Stocks A, B, and C:…

A: Price per share = pA, pB and pC Number of shares = nA, nB and nC

Q: State of economy Probability Rate of returns     Stock A Stock B Stock C Boom 0.35 0.24 0.36 0.55…

A:

Q: Please help me with 11-4 ??‍♀️

A: Introduction: Investment in Two stock = 10000 Weight of Stock A = 30% Weight of Stock B = 70% Stock…

Q: 2-10 We have the following information on a portfolio consisting of Stocks A, B, and C:…

A: We need to find the market values of A, B and C first.

Q: A stock is selling for $80 in the market. The company’s beta is 1.5, the market risk premium (rM -…

A: The Dividend Growth Model refers to a model that helps in calculating the intrinsic value of a stock…

Q: Here are some historical data on the risk characteristics of Ford and Harley Davidson.     Ford…

A: Given, sigma(F) = 30.9% sigma(HD) = 16.9% Beta(F) = 1.26 Beta(HD) = 0.69 sigma(market) = 12%…

Q: B24&Co stock has a beta of 1.60, the current risk-free rate is 3.10 percent, and the expected return…

A: In the given question we require to calculate the cost of equity for B24&co

Q: Suppose you invest $10,000 in Ford stock, and $30,000 in Tyco International Stock. You expect a…

A: Investment in Ford stock=$10000 Investment in Tyco international stock= $30000 expected return from…

Q: State of economy Probability Rate of returns     Stock A Stock B Stock C Boom 0.35 0.24 0.36 0.55…

A: Given data; State of economy Probability Rate of returns     Stock A Stock B Stock C Boom…

Stock Market Indices

Stock indexes are used to compare the price fluctuations of a group of stocks of similar companies, which are combined based on a similar industry or a particular market capitalization limit or type of market. The price comparison is based on a pre-determined standard method or indicators. These stock indexes are usually considered a base for comparison of a particular stock, and the performance of that particular company can be easily determined.