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Rank the following three stocks by their level of total risk, highest to lowest. Rail Haul has an average return of 12 percent and standard deviation of 25 percent. The average return and standard deviation of Idol Staff are 15% and 35%; and of Poker-R-Us are 9 percent and 20 percent. Before solving this problem, calculate the coefficient of variation.
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- An analyst has modeled the stock of a company using the Fama-French three-factor model. The market return is 10%, the return on the SMB portfolio (rSMB) is 3.2%, and the return on the HML portfolio (rHML) is 4.8%. If ai = 0, bi = 1.2, ci = 20.4, and di = 1.3, what is the stock’s predicted return?Rank the following three stocks by their level of total risk, highest to lowest. Rail Haul has an average return of 8 percent and standard deviation of 10 percent. The average return and standard deviation of Idol Staff are 10 percent and 20 percent; and of Poker-R-Us are 6 percent and 15 percent. Multiple Choice Rail Haul, Poker-R-Us, Idol Staff Idol Staff, Rail Haul, Poker-R-Us Poker-R-Us, Idol Staff, Rail Haul Idol Staff, Poker-R-Us, Rail HaulRank the following three stocks by their risk-return relationship, best to worst. Night Ryder has an average return of 10 percent and standard deviation of 30 percent. The average return and standard deviation of WholeMart are 11 percent and 35 percent; and of Fruit Fly are 16 percent and 32 percent. .Rank 1 2 3 4
- Landon Stevens is evaluating the expected performance of two common stocks, Furhman Labs, Inc., and Garten Testing, Inc. The risk-free rate is 4 percent, the expected return on the market is 11.5 percent, and the betas of the two stocks are 1.2 and .9, respectively. Landon’s own forecasts of the returns on the two stocks are 13.75 percent for Furhman Labs and 10.50 percent for Garten. Calculate the required return for each stock. Is each stock undervalued, fairly valued, or overvalued?Rank the following three stocks by their risk-return relationship, best to worst. Night Ryder has an average return of 12 percent and a standard deviation of 33 percent. The average return and standard deviation of WholeMart are 13 percent and 40 percent, and Fruit Fly is 18 percent and 35 percent. Rank Stock 1 2 3Rank the following three stocks by their risk-return relationship, from best to worst: Stock A has an average return of 15% and a standard deviation of 30%. Stock B has an average return of 10% and a standard deviation of 25%. Stock C has an average return of 20% and a standard deviation of 20%.
- Rank the following three stocks by their total risk level, highest to lowest. Night Ryder has an average return of 12 percent and standard deviation of 40 percent. The average return and standard deviation of WholeMart are 13 percent and 30 percent; and of Fruit Fly are 18 percent and 35 percent. Rank Stock 1 2 3Rank the following three stocks by their total risk level, highest to lowest. Night Ryder has an average return of 14 percent and standard deviation of 30 percent. The average return and standard deviation of WholeMart are 12 percent and 25 percent; and of Fruit Fly are 25 percent and 40 percent. Multiple Choice Fruit Fly, Night Ryder, WholeMart Night Ryder, WholeMart, Fruit Fly WholeMart, Fruit Fly, Night Ryder WholeMart, Night Ryder, Fruit FlyConsider two stocks, Stock D, with an expected return of 13 percent and a standard deviation of 28 percent, and Stock I, an international company, with an expected return of 16 percent and a standard deviation of 38 percent. The correlation between the two stocks is -0.1. What is the weight of stock D in the minimum variance portfolio?
- Suppose that, next year, you expect Intel’s stock to have a standard deviation of 30% and a beta of 1.2, and Walmart’s stock to have a standard deviation of 21% and a beta of 1.6. Based on these estimates, which stock carries more total risk? Which has more systematic risk? A. Walmart has both more total risk and more systematic risk. B. Walmart has more total risk and Intel has more systematic risk. C. Intel has more total risk and Walmart has more systematic risk. D. Intel has both more total risk and more systematic risk.The risk-free rate is 3 percent, the expected return on the PSEi is 13 percent, and its standard deviation is 23 percent. A local equity ABC stock, has a standard deviation of 50 percent but is uncorrelated with the market. Calculate ABC’s beta and calculate ABC’s expected return.Using an index model, and the information on the following two stocks, estimate the standard deviations of Stocks A and B. Then, compute the expected return, standard deviation and beta of the following portfolio Stock A. 30% Stock B. 45% Risk Free. 25% Stock Expected Return Beta Firm-Specific Standard Deviation А 13% 0.8 30% B 18 1.2 40 The market index has a standard deviation of 22% and the risk-free rate is 8%.
