A. Ali is a financial analyst who observes that the spot rates of the upcoming 4 years will be as follows r1 = 4.25%, r2 = 4.5%, r3 = 4.75%, and r4 = 5%. 1. Find fl, f2, f3, and f4. 2. Find 1f4 3. Find 1f3 4. Find 2f4
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- As a financial advisor at ABC Corporation, the CEO asked you to analyze the followinginformation pertaining to two common stock investments, TI and SG. You are told that a oneyear Treasury Bill will have a rate of return of 5% over the next year. Also, information froman investment advising service lists the current beta for TI as 1.68 and for SG as 0.52. You areprovided a series of questions to guide your analysis. Economy Probability TI SG market Recession 30% -20% 5% -4% Average 20% 15% 6% 11% Expansion 35% 30% 8% 17% Boom 15% 50% 10% 27% If you form a two-stock portfolio by investing RM30,000 in TI and RM70,000 in SG, whatis the portfolio beta and expected rate of return?As a financial advisor at ABC Corporation, the CEO asked you to analyze the followinginformation pertaining to two common stock investments, TI and SG. You are told that a oneyear Treasury Bill will have a rate of return of 5% over the next year. Also, information froman investment advising service lists the current beta for TI as 1.68 and for SG as 0.52. You areprovided a series of questions to guide your analysis. Economy Probability TI SG market Recession 30% -20% 5% -4% Average 20% 15% 6% 11% Expansion 35% 30% 8% 17% Boom 15% 50% 10% 27% 4. Based on the beta provided, what is the expected rate of return for TI and SG for the nextyear?As a financial advisor at ABC Corporation, the CEO asked you to analyze the followinginformation pertaining to two common stock investments, TI and SG. You are told that a oneyear Treasury Bill will have a rate of return of 5% over the next year. Also, information froman investment advising service lists the current beta for TI as 1.68 and for SG as 0.52. You areprovided a series of questions to guide your analysis. Economy Probability TI SG market Recession 30% -20% 5% -4% Average 20% 15% 6% 11% Expansion 35% 30% 8% 17% Boom 15% 50% 10% 27% 2. Calculate the standard deviations in estimated rates of return for TI, SG and market.
- As a financial advisor at ABC Corporation, the CEO asked you to analyze the followinginformation pertaining to two common stock investments, TI and SG. You are told that a oneyear Treasury Bill will have a rate of return of 5% over the next year. Also, information froman investment advising service lists the current beta for TI as 1.68 and for SG as 0.52. You areprovided a series of questions to guide your analysis. Economy Probability TI SG market Recession 30% -20% 5% -4% Average 20% 15% 6% 11% Expansion 35% 30% 8% 17% Boom 15% 50% 10% 27% 6. If you form a two-stock portfolio by investing RM70,000 in TI and RM30,000 in SG, whatis the portfolio beta and expected rate of return? 6. If you form a two-stock portfolio by investing RM70,000 in TI and RM30,000 in SG, whatis the portfolio beta and expected rate of return?Your business manager forwards the following information to you. Your businesses earned a real rate of return of 7.6% last year and inflation for the same period was 9.6%. What was your nominal rate of return using the Fisher Effect? (Note: nominal rates of return can be positive or negative.) (Round to 100th of a percent and enter as a percentage, e.g. 12.34% as 12.34.)The common stock of Air United, Inc., had annual returns of 15.6 percent, 2.4 percent, -11.8 percent, and 32.9 percent over the last four years, respectively. What is the standard deviation of these returns? Group of answer choices 13.29 percent 14.14 percent 16.50 percent 17.78 percent 19.05 percent show your work please and let me know if we can solve it by financial calculator
- The following are the monthly rates of return for Madison Cookies and for Sophie Electric during a six-month period. Month Madison Cookies Sophie Electric 1 −0.04 0.072 0.06 −0.023 −0.07 −0.104 0.12 0.155 −0.02 −0.066 0.05 0.02 Compute the following. a. Average monthly rate of return Ri for each stockb. Standard deviation of returns for each stockc. Covariance between the rates of returnd. The correlation coefficient between the rates of returnWhat level of correlation did you expect? How did your expectations compare with the computed…Based on five years of monthly data, you derive the following information forthe companies listed: Company SDi rm Padma 11.10% 0.82 Meghna 12.60% 0.63 Jamuna 6.60% 0.45 Karnafully 9.70% 0.70 SD on Market 7.60% 1.00 Assuming a risk-free rate of 9% and expected return for the market portfolio is 16 % compute the expected (required) return for all the stocks.Floyd looking at a market and find 1) earnings for the past year were $1,250 per share, 2) the growth rate in earnings is expected to be 3.0% for the next FOUR years and 3) a reasonable PE ratio at the end of year 3 is assumed to be 18. The required return is 10%. If fair value today is the PV of expected future earnings, what’s fair value today?
- Year-to-date, Yum Brands had earned a 3.90 percent return. During the same time period, Raytheon earned 4.68 percent and Coca-Cola earned −0.55 percent. If you have a portfolio made up of 35 percent Yum Brands, 30 percent Raytheon, and 35 percent Coca-Cola, what is your portfolio return? (Round your answer to 2 decimal places.)Year-to-date, Yum Brands had earned a 3.80 percent return. During the same time period, Raytheon earned 4.26 percent and Coca-Cola earned −0.46 percent.If you have a portfolio made up of 30 percent Yum Brands, 30 percent Raytheon, and 40 percent Coca-Cola, what is your portfolio return? (Round your answer to 2 decimal places.)a. Given the following holding-period returns, LOADING... , compute the average returns and the standard deviations for the Zemin Corporation and for the market. b. If Zemin's beta is 1.87 and the risk-free rate is 6 percent, what would be an expected return for an investor owning Zemin? (Note: Because the preceding returns are based on monthly data, you will need to annualize the returns to make them comparable with the risk-free rate. For simplicity, you can convert from monthly to yearly returns by multiplying the average monthly returns by 12.) c. How does Zemin's historical average return compare with the return you believe you should expect based on the capital asset pricing model and the firm's systematic risk? Month Zemin Corp. Market 1 5 % 6 % 2 2 1 3 2 0 4 −4 −1 5 4 3 6 3 4