Rank 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 Fly
Q: A power call option pays off (max(ST-X, 0))2 at time T, where ST is the stock price at time T and X…
A: We are given a power call option with a payoff function as-.. The other details are:Current price:…
Q: nmoo Company's average age of accounts receivable is 89 days, the average age of accounts payable is…
A: The cash conversion cycle (CCC) is a financial metric that measures the time it takes for a company…
Q: 2. Sam and Dean, brothers, have $2,850 to invest. They visit the Winchester Brokerage to seek…
A: The problem requires calculating the weightage of investment in ETFs XYZ and ABC. To do this, we…
Q: Given the data in the following table, what is the IRR of Project B? 4 $170 $190 0 -$600 -$520 1…
A: To find the Equivalent Annual Series (EAS) for Project A, we need to convert the uneven cash flows…
Q: Nabb Construction Company is trying re-president of finance, has given you the following information…
A: WACC is the cost of capital for company and is the weighted cost of equity, weighted cost of debt…
Q: $230,000 mortgage has a stated annual rate of 4.5% on a 30 year loan. What was the total you paid…
A: The stated annual rate means an annualized rate of interest that does not take into account the…
Q: The University of California has two bonds outstanding. Both issues have the same credit rating, a…
A: YTM, or Yield to Maturity, is a financial measure used to calculate the total return anticipated…
Q: You are on options trader specializing in the Singapore dollar. The current spot rate is $0.60/S$. A…
A: 1 . Call option provides the holder of the option , the right and not the obligation to buy…
Q: Eaton Electronic Company's treasurer uses both the capital asset pricing model and the dividend…
A: The Capital Asset Pricing Model (CAPM) is a financial model used to determine the expected return on…
Q: The Target Copy Company is contemplating the replacement of its old printing machine with a new…
A: After tax cash outlay of new machine is computed as follows-After tax cash outlay of new machine =…
Q: i) Count Bads 684 38 659 26 724 19 861 19 757 11 315 3 Grand Total 4000 116 ii) Age Group 18-23…
A: Basel II framework:The second of the three Basel Accords is called Basel II. The three "pillars"…
Q: Replacement Decision, Computing After-Tax Cash Flows, Basic NPV Analysis Okmulgee Hospital (a large…
A: NPV is the capital budgeting technique that is used to evaluate the profitabilaty of the capital…
Q: Interest rate swap. Consider a portfolio of floating-rate bonds that all mature in three years. What…
A: A fixed-floating rate, also known as a fixed-to-floating rate, is a hybrid financial instrument that…
Q: The future value of an ordinary annuity for any given interest rate and number of periods is always…
A: Annuity refers to a fixed and constant sum of cash flow that occurs in each period.For example…
Q: A real estate agent works on a 13% commission. What is her commission on a house that she sold for…
A: Commission is one of the useful source of revenue. Commission is generally paid on sale of goods and…
Q: l Hubbell owns 6,001 shares of the Piston Corp. There are 12 seats on the company board of…
A: In cumulative when there are multiple candidates than one voter can give multiple votes and can…
Q: 6 Problem 9-07 eBook You are analyzing the U.S. equity market based upon the S&P Industrials Index…
A: In the given case, we need to value the index using the cash flows and growth rate, using the…
Q: General Mills decides to produce Warm Delights internally (in-house), they would face an immediate…
A: IntroductionNet Present Value (NPV)The net present value (NPV) applies to a series of cash flows…
Q: A $230,000 mortgage has a stated annual rate of 4.5% on a 30 year loan. Approximately how many…
A: Stated annual interest rate is the rate of interest that does not take into account the effect of…
Q: A $230,000 mortgage has a stated annual rate of 4.5% on a 30 year loan. What is the monthly…
A: Compound = Monthly = 12Principal Amount = p = $230,000Rate of Return = r = 4.5 / 12 = 0.375%Time = t…
Q: obcatSwag is a company that has never paid a dividend. You expect them to begin paying a dividend of…
A: Capital gain yield is the amount of rate of return earned due to the increase in prices of stock…
Q: Sandhill Company is issuing eight-year bonds with a coupon rate of 6.8 percent and semiannual coupon…
A: A bond is a kind of debt security issued by the government and private companies to the public for…
Q: ortfolio 50/50 Risk-f
A: There are only 2 stocks in the universe of Stock Market, based on the given data for 3 months we…
Q: Lander Company has an opportunity to pursue a capital budgeting project with a five-year time…
A: NPV is also known as Net present value. It is a capital biudegting tehcnique which helps in decision…
Q: Consider an American Put option with time to expiry of 5 months and a strike price of 82. The…
A: The binomial model is a mathematical model used in finance to value options. It assumes that the…
Q: The president of Real Time Inc. has asked you to evaluate the proposed acquisition of a new…
A: Terminal cash flow, also known as terminal value or terminal cash flow, is a financial concept used…
Q: If you own 11,000 shares of stock of Nike and it pays a dividend of $0.28 per share, then what is…
A: When the company receives profits and distributes them among the shareholders. The share of profit…
Q: Bill Padley expects to Invest $19,000 for 2 years, after which he wants to receive $22,990.00. What…
A: Present Value = pv = $19,000Time = t = 2 yearsFuture Value = fv = $22,990
Q: Portfolio 1 2345 E(r) σ 7.8% 10.5% 9.00% 15.0% 5.6% 6.0% 11.7% 20.5% 7.2% 8.4%
A: Portfolio:According to the definition of a portfolio, it is a collection of various assets that…
Q: If you win $10 000 and invest it in an account that earns 3.5%/a compounded weekly, how much can you…
A: Given variable in the question:PV =$ 10000Rate=3.5% (compounded weekly)N=5 yearsRequired: Amount of…
Q: Charlene is evaluating a capital budgeting project that should last for 4 years. The project…
A: Depreciation refers to the amortization of the capital expenditure over the period or the life of…
Q: The market price of a $1000 par value bond issued by Kramerica, Inc that makes semiannual coupon…
A: Solution:-Coupon rate is the percentage of annual coupon amount to the face value of the bond.To…
Q: Oriole Company reported a net loss of $13440 for the year ended December 31, 2022. During the year,…
A: Cash flows from operating activities (CFO) include all cash flows generated/incurred in the core…
Q: An investor pays the following separate amounts into a fund: £11,900 at t=6, £17,600 at t=14, and…
A: As per the given information:Effective annual rate of interest = 11.9% during the first 7…
Q: Romano Inc. has the following data. What is the firm's cash conversion cycle? Inventory Conversion…
A: Cash conversion cycle indicates the period taken by a firm to convert it's products into…
Q: 50. If an asset is operating with an availability of 98% at a performance rate of 84%. What is the…
A: Overall Equipment Effectiveness (OEE) is a performance metric used in the manufacturing industry to…
Q: IBM stock currently sells for 44 dollars per share. Over 5 months the price will either go up by…
A: Delta-neutral portfolio refers to the strategy used for the various positions for balancing positive…
Q: You must evaluate a proposal to buy a new milling machine. The purchase price of the milling…
A: As per our guidelines, we are supposed to answer only 3 sub-parts (if there are multiple sub-parts…
Q: An unbiased predictor of future exchange rates is a predictor that is almost always correct. True…
A: The prediction of future exchange rates plays a significant role in global financial markets and…
Q: What is the present value of a security that will pay $10,000 in 20 years if securities of equal…
A: Future Value = fv = $10,000Time = t = 20 yearsInterest rate = r = 5%
Q: Alpha Industries is considering a project with an initial cost of $8 million. The project will…
A: Net present value (NPV) is a financial method used to evaluate the profitability of an investment or…
Q: of these statements is true? Multiple Choice When people purchase a stock,…
A: Owning or buying a stock means that the investor becomes a part of the business. He now has the…
Q: Swann Systems is a small but fast-growing company headquartered in Bangalore, India. Bangalore is…
A: Operating costs are those costs which are necessary for the business operations. Gross margin is the…
Q: Cost of Equity The earnings, dividends, and stock price of Shelby Inc. are expected to grow at 8%…
A: Cost of Equity:The expense that the issuer will incur is known as the cost of equity.. The return…
Q: Match each business description with the BEST model for fundraising. ✓ A USC focused Matcha Cafe ✓ A…
A: The choice of the best fundraising model depends on the nature and stage of the business, the level…
Q: 1 unit of Currency A costs 1.47 units of Currency B, 1 unit of Currency B costs 0.66 units of…
A: Arbitrage profit refers to the strategy of investing whose motive is to earn profit at various…
Q: Project S costs $17,000, and its expected cash flows would be $5,000 per year for 5 years. Mutually…
A: In project management, mutually exclusive projects refer to a situation where two or more projects…
Q: Suppose the return of asset A to D, is given as follows: Asset 2018 2019 2020 2021 A 9% 10% -2 %…
A: Expected return is a financial concept used to estimate the average gain or loss an investor…
Q: A firm goes public. The firm receives $38 for each of the 4.5 million shares sold. The initial…
A: The total direct cost of an Initial Public Offering (IPO) refers to the sum of all expenses incurred…
Q: What is the net after tax cash flow for year 4 if the applicable tax rate is 40%? a. $39,328 b.…
A: We are given the following income statement and cash flows of a project for years 1-5:Required:1.…
Rank 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.
-
Fruit Fly, Night Ryder, WholeMart
-
Night Ryder, WholeMart, Fruit Fly
-
WholeMart, Fruit Fly, Night Ryder
-
WholeMart, Night Ryder, Fruit Fly
Step by step
Solved in 3 steps
- 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, 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 4Rank 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 3
- 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, 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%.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 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.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%.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.
- Consider the following information for three stocks, A, B, and C. The stocks' returns are positively but not perfectly positively correlated with one another, i.e., the correlations are all between 0 and 1. Expected Standard Stock Return Deviation Beta A 10% 20% 1.0 B 10% 10% 1.0 C 12% 12% 1.4 Portfolio AB has half of its funds invested in Stock A and half in Stock B. Portfolio ABC has one third of its funds invested in each of the three stocks. The risk-free rate is 5%, and the market is in equilibrium, so required returns equal expected returns. Which of the following statements is CORRECT? a. Portfolio AB's coefficient of variation is greater than 2.0. b. Portfolio AB's required return is greater than the required return on Stock A. c. Portfolio ABC's expected return is 10.66667%. d. Portfolio ABC has a standard deviation of 20%. e. Portfolio AB has a standard deviation of 20%.Consider the following information for three stocks, Stocks A, B, and C. The returns on the three stocks are positively correlated, but they are not perfectly correlated. (That is, each of the correlation coefficients is between 0 and 1.) Stock Expected Return Standard Deviation Beta A 8.30 % 15 % 0.7 B 10.30 15 1.2 C 11.50 15 1.5 Fund P has one-third of its funds invested in each of the three stocks. The risk-free rate is 5.5%, and the market is in equilibrium. (That is, required returns equal expected returns.) The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet What is the market risk premium (rM - rRF)? Round your answer to two decimal places. fill in the blank 2% What is the beta of Fund P? Do not round intermediate calculations. Round your answer to two decimal places. fill in the blank 3 What is the required return of…The following table shows the sensitivity of four stocks to the three Fama–French factors. Estimate the expected return on each stock assuming that the interest rate is 2%, the expected risk premium on the market is 7%, the expected risk premium on the size factor is 3.2%, and the expected risk premium on the book-to-market factor is 4.9%.