Calculate the yield of the following stock.

Q: The wider the dispersion of returns on a stock, the:

A: Investors evaluate the portfolio or security on the basis of risk profile. The risk profile can be…

Q: Calculate the maximum stock level

A: Maximum level of stock = Reorder level + Reorder quantity - (Minimum usage * Minimum lead time)

Q: What are the two components of most stocks’ expected total return?

A: Expected total return refers to the full return of an investment over a certain period of time.

Q: How do you calculate price earnings ratio, given the stocks historical prices?

A: Price earnings ratio is ratio of price per share and earning per share. PE ratio=Price per…

Q: How do you calculate the Treynor ratio for the AMD stock?

A: Treynor ratio is referred to as the portfolio performance, which used to measure regarding the…

Q: discuss what is the stock price?

A: >Stocks, when referred to in relation with the paid in capital of a corporation, refers to the…

Q: In evaluating (stock) portfolio return we use the market values at the beginning of the period to…

A: The percentage of a particular stock or any asset in a portfolio is known as the weight of the asset…

Q: The required return on Miller Corporation stock is

A: The beta of a stock is the degree of responsiveness to movements in price with changes in the stock…

Q: what is the best type of chart to represent the variable Tesco Stock Price?

A: The stock price movements can represent with the help of different chart patterns. The different…

Q: Define risk premium for individual Stock i

A: The risk premium for an individual stock i It is the expected ROR on investment that exceeds…

Q: Explain the Weighted Average Coupon?

A: Weighted average coupon (WAC): It is a proportion of the rate of return for a pool of home loans…

Q: Determine graphically the beta coefficients for Stocks A and B. b. Graph the Security Market Line,…

A: Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

Q: What is a stock’s volatility?

A: Stock Volatility:   Volatility is defined as a statistical measure of the dispersion of the returns…

Q: Define required rate of return on stock

A: Answer: Usually, return is a benefit received on investment. This covers any change in stock…

Q: Define Rate of return on stock investment.

A: Capital Stocks:   Common stock and preferred stock are the two types of capital stocks. Common…

Q: Explain required rate of return on stock

A: The required rate of return is the minimum acceptable rate of return that an investor expects to…

Q: А. Compute the standard deviation of each stock. В. What is the covariance and correlation…

A: The mathematical measure of market uncertainty is the standard deviation. In stocks the standard…

Q: Calculate the expected return for Stock A.

A: Expected Return: It represents the profit or loss expected by an investor on an investment. It is…

Q: Using multi-period Binomial model derive the expression for the probability with which the price of…

A: The Black Scholes model and Binomial model are used for the option pricing under option pricing…

Q: Return formula for common stock?

A: Applying capital asset pricing model (CAPM),

Q: How do you calculate the beta of stock?

A: Beta is the measure of stock's volatility to the overall market, and is calculated as-

Q: how do you calculate a stocks average monthly return,its return variance ,standard deviation and…

A: Variance is a measure of risk of returns, it shows how much actual return has deviated from its…

Q: How GARCH (generalized ARCH model) model is applied to Stock Price Volatility?

A: GARCH model is one of the models that is usually used by the financial analysts. The financial…

Q: The return of stock B is __% The volatility of stock A is __% The volatility of stock B is __%

A: Thank you for posting questions. Since you have posted multiple questions, as per the guideline I am…

Q: what can you say about the price movements of the stock? (TEL)

A: TEL is the ticker of TE Connectivity Ltd. This stock is listed in the NYSE.

Q: How do you calculate dividend yield for stock?

A: dividend yield is the ration of dividend paid by the firm divided by price of share of the firm.

Q: Define actual rate of return on stock

A: Actual rate of return on stock

Q: Define Risk premium for Stock i, RP

A: The risk premium for stock 'i' is also called as equity risk premium.

Q: pect the stock to have a retu eturn according to the CAP the stock? (Select the bes

A: The expected return can be calculated as follows : Calculations for above :

Q: What is the expected return on the firms stock

A: Here, Proportion of Debt is 75% Proportion of Equity will be (1-75%) = 25% Cost of Debt is 5% Risk…

Q: Report the beta of each stock and demonstrate a clear understanding of the concept of market…

A: The efficient market hypothesis: The efficient market hypothesis postulates that it is impossible to…

Q: 1. Determine the volatility for the following three stock portfolio

A: Standard deviation is measured to measure the volatility of the stocks in the portfolio.  Where,…

Q: How to know what price target to buy a stock?

A: A price target is an analyst's forecast for the future value of a commodity. Price targets can apply…

Q: Distinguish between common stock and preferred stock,and explain the difference between market value…

A: Common stock is a security that represents ownership in a corporation. Holders of common stock elect…

Q: What will be the current stock price?

A: The current price of a stock is the most recent selling price of a stock in the market. It is the…

Q: In Shiller’s terminology, what are ex post stock prices?

A: The intrinsic value of the stock could be higher or lower. The stock investor's purpose is to find…

Q: What are the two sources, or components of return for stock?

A: A share in the ownership of a company is known as stock. When stock is purchased a small piece in…

Q: How do you calculate conditional volatility of a stock returns?

A: Volatility represents how large an asset's price swing around the mean price i.e the statistical…

Q: Define required rate of return on Stock i

A: Stock refers to the security that represents the ownership of the stockholders in the company. The…

Q: What are some analyzes we can do to predict which stock will go up?

A: Stock price movement is primarily speculative in the short term (two to three months). The price…

Q: The following questions are based on the given information from table of probability distributions…

A: Variance is calculated by using following formula: Variance =∑Prob×Return -Expected Return2 Standard…

Q: Define Stockout costs.

A: Stock out costs are the cost which arises when an organization is not able to fulfil the demand due…

Q: Calculated the expected return of each stock

A: Expected Return on Stock = Sum of (Probability x Return) in each case

Q: Discuss the application of the Capital Asset Pricing Model in stock selection.

A: CAPM is an abbreviation used for Capital asset Pricing model which helps the investors in evaluating…

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.