Q1. One of your company's customer has approached you and the customer says that he wishes to invest 20,000 OMR. Company name Expected returns R Standard Deviations O Euro Foods 20 10 Sohar Foods 14 8 A. Calculate the expected returns for the suggested portfolios as below, Portfolio Euro Foods Sohar Foods 1 25% 75%
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- Use the following tables to assess the worthiness of Verticon stock as an investment. Verticon Stock Data (Current and Historical) 3:45PM EDT Aug 16, 2011 Price 18.85 USD Change +0.64 (+3.51%) Mkt cap 147.1B Div/yield 0.20/4.24 Shares 8,012 Beta 0.70 Book/share 11.335 EPS 1.11 12/2010 12/2009 12/2008 (Millions of Dollars) Total Assets 195,014 195,949 111,148 Total Liabilities 107,201 122,935 53,592 Preferred Shareholders’ Equity 52 61 73 Common Shareholders’ Equity 87,761 72,953 57,483 Shares Outstanding 8,012 8,070 6746 Book/Share ? 9.040 8.521 Q1 (Mar ’11) 2010 Net profit margin 15.24% 12.24% Return on equity 11.60% 9.30% Which one in bold? One of the most important features of a stock is its book value. The book value per share of Verticon’s stock for the year 2010 was equal to (10.954, 13.693, 11.502). Looking at the (Market cap, EPS, change in price, beta value, ROE) ,…Q9 At the beginning of the month, you owned $6,000 of News Corp, $5,000 of First Data, and $8,500 of Whirlpool. The monthly returns for News Corp, First Data, and Whirlpool were 8.24 percent, −2.59 percent, and 10.13 percent. What’s your portfolio return? (Do not round intermediate calculations and round your final answer to 2 decimal places.) PORTFOLIO RETURN. %The following information relates to five stocks listed in five different sectors at the Nairobi Securities Exchange .The return on treasury bills is 4% and the average return in the market has been found to be 10% Estimated Return(%) Beta Sasini Ltd 8 0.7 Stanbic Holdings 6.2 1 Scan group Ltd 15 1.2 Crown Paints Kenya 10.5 1.4 Sanlam Kenya PLC 13 -0.4 Required: Using the capital asset pricing model (CAPM) determine the Required Rate of Return (RRR) for each stock and state whether it is undervalued, overvalued or fairly valued.
- You have OMR 5,000 to invest in shares of A or B the expected returns and standard deviations of which are as follows. expected return standard deviation A 17 6 B 25 10 Required:a. Calculate expected return and standard deviation from a portfolio consisting of 50 per cent of A and 50 per cent of B assuming shares in A and B are perfectly negatively correlated. b. What is meant by coefficient of variation? Calculate coefficient of variation for shares in A and B and decide which of the two shares you would prefer to investment in and why?Using the equity asset valuation model (CAPM) equation, determine the required return for the shares of the following companies, if the market return is 7.50% (Rm = 7.50%) and the risk-free asset return is 1.25% (RF = 1.25%). You must show all counts. Stock Beta SKT 0.65 COST 0.90 SU 1.42 AMZN 1.57 V 0.94SATA stock currently sells for RM123. It's expected earnings per share are RM5.12. The average P/E ratio for the industry is 24. If investors expected the same growth rate and risk for SATA as for an average firm in the same industry, it's stock price would Select one: a. stay about the same. b. fall. c. there is not enough information. d. rise.
- If you pay K95 per share, what is the most money you could lose over the year? (3 marks) (e) Stock Initial Price Final Price Shares (millions) ABC K25 K30 20 XYZ K100 K90 1 (1) Determine the portfolio initial and final value and the percentage change in portfolio value (2) Calculate the initial and final price-weighted index and the percentage change in the index. Explain the weaknesses of the measure above (4) Calculate the market-value weighted index and the percentage change in the index. Compare that to the return of a portfolio that holds K500 of ABC stock for every K100 of XYZ stock(an index portfolio)5 ABL shares are currently trading at a price of $30, while HHT shares are trading at a price of $37.98. The risk-free rate is 1.24% per year. Using the information above, perform each of the following tasks: c) Compute the Delta (number of shares) that if you also short a call on HHT will create a risk-free portfolio. Assume the call is European and that the strike-price is $34.7517 d) Using the information above, compute the risk-neutral probability of HHT shares increasing 10% if the time-step to the next node is 1 year. f) Find the Black-Scholes price of the call on ABL with a strike price of $29.19 if there is 6 months until the call expires and the annual standard deviation of the stock price is 20%.You have OMR 5,000 to invest in shares of A or B the expected returns and standard deviationsof which are as follows. r (bar) standard deviation A 17 6 B 25 10 a. Calculate expected return and standard deviation from a portfolio consisting of 50 per centof A and 50 per cent of B assuming shares in A and B are perfectly negatively correlated.
- Use the following information to answer questions 1- 2 XQV’s stock is trading at $40. Earnings per share are expected at E1 = $5.00; all will be paid out as dividends. Valuing the stock as a perpetuity P0 =E1 / r, the expected return is 12.5%. The risk-free rate is 6%; the market risk premium is 8%. XQV’s beta is 0.875. The stock is ………………………………………………….. Group of answer choices a. overpriced b. fairly priced c. underpriced 2. Its alpha is ………..……………………… %.Using the stock table for Dell Technologies below, calculate the earnings per share. Round your answer to the nearest cent.Do not include the $ in your answer.Dell TechnologiesDVMT$66.26$66.40-$66.96$42.02-568.25NameSymbolCloseDay Range52-Week RangeVolumeP/EDividendDividend YieldEPS895,028103.53$0.000%?You have $10,000 to invest - $3,500 in Company ABC, the remaining amount in Company CBA. The expected returns for these stocks are 20% and 15%, respectively. The expected return on your portfolio is 18.25% 16.75%13.50%17.50%