Graph the value of your portfolio as a function of the relevant stock price. Please create a graph for stock prices between 130 and 165. Assume today is the last day for exercising your options. Short a call at 163, long a put at 163, and long one share of the stock.
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Subject :- Accounting \
Graph the value of your portfolio as a function of the relevant stock price. Please create a graph for stock prices between 130 and 165. Assume today is the last day for exercising your options.
- Short a call at 163, long a put at 163, and long one share of the stock.
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- You ask a stockbroker what the firm’s research department expects for the three (3) stocksabove, that is, Stock X, Y and Z. The broker responds with the following information:Stock Current Price Expected Price Expected Dividend X 22 24 0.75 Y 48 51 2.00 Z 37 40 1.25Required:B. Calculate the estimated future rate of return for Stock X, Y, and Z. C. Determine which stock is overvalued, undervalued, properly valued, and state whyD. Illustrate with the use of the Security Market Line (SML) how Stock X , Y and Z wouldappear on it.You have a portfolio with the following: Stock Number of Shares Price Expected Return W 1,000 $ 57 14% X 900 34 18 Y 650 70 16 Z 875 55 17 What is the expected return of your portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)You own a portfolio that has $5,758 invested in Stock A and $1,616 invested in Stock B. If the expected returns on these stocks are -0.12 and 0.24, respectively, what is the expected return on the portfolio? Enter the answer with 4 decimals (e.g. 0.1234).
- Suppose you allocate 2/5 of your portfolio value to a stock that has an expected return of 8% and the rest to another stock that has an expected return of 17%. What is the expected return on your two-stock portfolio? Note: Show your answer in units of percents, use plain numbers with at least two digits after the decimal (e.g., for 12.34%, type 12.34).You own a portfolio that has $18,000 invested in Stock A and $17,000 invested in Stock B. The expected returns on these stocks are 15.9 percent and 7.1 percent, respectively. What is the expected return on the portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)Please answer the following question asap……. A portfolio consists of 100 shares of stock and 1500 calls on that stock. If the hedge ratio for the call is 0.7, what would be the dollar change in the value of the portfolio in response to a $1 decline in the stock price?
- Suppose you are given the following information about 2 stocks, what is the expected return of a portfolio weighted 55% in stock A and 45% in stock B? E(RA)=16% E(RB)=8% σA=22% σB=12% σA,B=−0.003696 Enter rate in decimal form, rounded to 4th digit, as in "0.1234"Please show working Please answer ALL OF QUESTIONS 1 AND 2 1. Assume that the risk-free rate is 3.5% and the market risk premium is 8%. a. What is the required return for the overall stock market? Round your answer to two decimal places. __________ % b. What is the required rate of return on a stock with a beta of 2.4? Round your answer to two decimal places. __________ % 2. An individual has $50,000 invested in a stock with a beta of 0.8 and another $55,000 invested in a stock with a beta of 2.0. If these are the only two investments in her portfolio, what is her portfolio's beta? Do not round intermediate calculations. Round your answer to two decimal places._______Consider the following information: State Probability Stock A Stock B Stock C Boom 0.32 -0.15 0.04 -0.14 Bust 0.68 0.01 0.03. 0.27 What is the expected return of a portfolio that has invested $7,525 in Stock A, $18,067 in Stock B, and $6,092 in Stock C? (Hint: calculate weights of each stock first). Enter the answer with 4 decimals (e.g. 0.1234).
- Stocks A and B have the following historical returns: Year Stock A's Returns, rA Stock B's Returns, rA 2014 (19.00 (14.70 %) 2015 34.75 19.50 2016 13.75 30.90 2017 (4.25 (9.30 ) 2018 34.25 33.10 Calculate the coefficient of variation for each stock and for the portfolio. Round your answers to two decimal places. Stock A Stock B Portfolio CV Assuming you are a risk-averse investor, would you prefer to hold Stock A, Stock B, or the portfolio?3.Consider the three stocks in the following table. P t represents price at time t, and Q1 represents shares outstanding at time t. Stock C splits two for one in the last period. P0 Q0 P1 Q1 P2 Q2 A 90 100 96 100 95 100 B 50 200 45 200 45 200 C 100 200 110 200 55 400 a.Calculate the rate of return on a price-weighted index of the three stocks for the first period (t=0 to t=1). b.What must happen to the divisor for the price-weighted index in year 2? Calculate the rate of return for the second period (t=1 to t=2)Consider the three stocks in the following table. P, represents price at time t, and Q, represents shares outstanding at time t. Stock C splits two-for-one in the last period. (LO 2-2) A B C Po 90 50 100 Qo 100 200 200 P₁ 95 45 110 Q₁ 100 200 200 P₂ 95 45 55 a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t = 0 to t = 1). b. What must happen to the divisor for the price-weighted index in year 2? c. Calculate the rate of return of the price-weighted index for the second period (t = 1 to t=2). Q₂ 100 200 400
