Q: YYYYMM Return(Stk1) Return(Stk2) Return(Market) Return(T-bill) 201701 7.75% 3.00% 6.18% 0.20% 201702…
A: The difference between the expected return by CAPM (capital asset pricing model) and the expected…
Q: Shinepukur- DuPont Analysis 2020 2019 Net Profit 49353916 46522075 Revenue 1205076326 1533121181…
A: Interpretations -
Q: RIO Altman Z Score 2018 2019 2020 a 0.91 0.90 0.88 0.30 0.27 0.28 0.14 0.18 0.18 0.00283 0.000344| d…
A: Ratio analysis is a tool used by the financial analyst to measure the financial performance of the…
Q: Question: Calculate the average annual growth rate of Microsoft from the fiscal year ending 2009…
A: Calculate the average annual growth rate as follows:
Q: YYYYMM Return(Stk1) Return(Stk2) Return(Market) Return(T-bill) 201701 7.75% 3.00% 6.18% 0.20% 201702…
A: The Capital Asset Pricing Model (CAPM) is a mathematical model that explains the relationship…
Q: BE.09.09 Fixed asset turnober ratio 20Y5, 20Y4
A: Fixed Assets Turnover Ratio:- It measures how well a company is using Fixed assets to generate…
Q: 11:35 ull 4G A goodman.com 78 Goodman Group 2020 Five year financial summary 2016 $M 2017 $M 2018 $M…
A: Gross profit refers to the profit that an organization makes by deducting cost of goods sold from…
Q: The corrected net income in 2021 a. P752,900 b. P846,100 c. P799,900 d. P751,100 The effect of the…
A: The income and expenditure is adjusted on the basis of revenue earned or expenses incurred during…
Q: Time left 1:23:23 tate probability Return on A RETURN ONB POOR 40% |-0.06 -0.09 NORMAL 35% 0.16 0.14…
A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: Return on Equity* Return on Capital Employed* Gross profit margin Operating profit margin Interest…
A: Lets understand the basics. Return on equity shows how much return is generated by using the equity…
Q: 2020 2019 (a) Current ratio. 1.80 :1 1.77 :1 (b) Inventory turnover. 1.80 2.17 (c) Profit margin.…
A: a Current Ratio 2020 2019 Cash and cash equivalents $ 330…
Q: calculate their mean returns, standard deviations,
A: Portfolio is the collection of securities. In Markowitz portfolio selection theory risk is…
Q: RAK- DuPont Analysis 2020 2019 Net Profit 329485359 793650022 Revenue 5233144472 6408004827 Total…
A: Ratio is a tool which is used to evaluate the firm’s growth and performance by establishing the…
Q: Beta Limited has an operating gearing of 3. If activity increases by 10% the profit of the business…
A: Operating gearing = %change in EBIT / %change in Sales Currently, the operating gearing ratio is 3.…
Q: ompute Profit Margin if Net İncome:2.026 ; Sales:17.193 ;Total Assets: 31.483 ; Total Equity:…
A: Given information : Net İncome = 2.026 Sales = 17.193 Total Assets = 31.483 Total Equity = 12.804
Q: Internal Rate of Return Wendell’s Donut Shoppe is investigating the purchase of a new $18,600…
A: 1. Calculate the total annual cash inflows associated with the new machine for capital budgeting…
Q: Calculate the Average return of Company A and Company B Year Company A Company B 1 (-10) 8. 6. 25…
A: Following is the answer to the question
Q: Current Quick Selected Ratios for RR RR 1.75 0.92 TL/Assets Turnover of Cash DSO(365-day year) Inv.…
A: According to the given question, we are required to explain the inaccuracy under the RR column.…
Q: 4.b Gross Sales Returns & allow (72,400.00) Net Rev 100.00 CGS Beg Inv Purchase Returns & allow…
A: Net Revenue = Gross Sales - Return and Allowances
Q: ABS GMA Ratio Analysis 2010 2009 2008 2007 2010 2009 2008 2007 Liquidity Management Working capital…
A: Financial ratios are an important source of analyzing the financial statements of a company. These…
Q: COMPANY A RATIO 2019 2018 Liquidity 1 Current Ratio 2 Quick Ratio Profitability 3 ROE 4 ROA 0.67…
A: Ratio analysis is the analysis in which ratios are compared for different periods and companies.
Q: 9:51 AM O 16 Assignment 1 .pdf •.. debt-to-total-assets ratio 55% C. d. debt-to-equity ratio 1 times…
A: You have posted a question with multiple sub-parts. We will solve the first three parts for you.…
Q: YR 3 (2021) YR 2 (2020) YR 1 (2019) CURRENT RATIO 2.8 2.5 2.0 ACID TEST RATIO 0.7 0.9 1.2 ACCOUNTS…
A: Dividend Yield ratio: It is the ratio will be used to calculate the ratio of…
Q: . Explain what is meant by: a. Cost of debt b. Cost of preferred stock C. Cost of equity
A: Cost of Debt: It refers to the effective rate of return paid by the company on its debt like bonds,…
Q: Data needed: SCI 1. COGS 38.6% 2. Selling and admin exp 6.8% 3. Interest exp 0.1% 4. Income tax exp…
A: Cost of goods sold forms the highest part. It can be demonstrated in the following pie chart
Q: 15- XYZ Co its selected financial statements items are given as following. Total net sales equals to…
A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…
Q: Required Informatlon Problem 12-6B Use ratios to analyze risk and profitability (LO12-3, 12-4) (The…
A: “Since you have asked multiple sub question, we will solve the first three sun questions for you. If…
Q: [7] In 2020 the return on assets was 14% and the debt ratio was 40%. Compute the return on equity.…
A: Return on equity (ROE) is the method that measures the rate of return which investors receive on…
Q: PV Years Percent Compound FV $9,817.30 27 14.59% Weekly a. $288,108.80 O b. $501,663.75 O c.…
A: No. of weeks=Years×Number of weeks in a year=27×52=1404
Q: Compute Return on equity ratio if Net Income:2.026 ; Sales:17.193 ;Total Assets: 31.483 ; Total…
A: When the company wants to know the profit of the corporation in relation to its stockholder’s equity…
Q: 1.What is the covariance between Microsoft and HP? 2. What is the covariance between General…
A: Since there are 4 subparts, according to our guidelines, we will answer the first three. Please…
Q: 6 output-1.indd O File | E:/CFA/2020-L1V3.pdf AD O SEM: Fit (David A. K... CNKI P ile O The Income…
A: 1) The company efficiency can be ascertained with the help of following ratios: From the above…
Q: If assets are $348,000 and liabilities are $188,000, then equity equals: Multiple Choice 6 Ints S…
A: Answer:- Equity = Assets - Liabilities =$ 348,000 - $188,000 = $ 160,000
Q: Probability % m 35- 30- A 25- 20- 15- 10- 5- 0- C A A: -20% return B: -15% return C:0% return D: 15%…
A: GIVEN, STOCK probability return A 10% -20% B 20% -15% C 15% 0% D 25% 15% E 30% 20%
Q: Question 8 Consider the following four risky assets: Expected Standard Retums Deviation 15.00% Asset…
A: An Investor is the person who invests money in properties in order or sole objective of gaining…
Q: Sensitivity Analysis (in '000) Optimitic(10% positive) Pessimistic $2,539,026.00 2,539,026*(1+10%) =…
A: Sensitivity analysis is a technique to estimate the maximum profit and loss by changing variables.…
Q: Company has return on assets 12.4% and debt-equity ratio is 0.25. What is ROE? Select one: a.35.43%…
A: Return on Equity(ROE) is the method or a financial ratio that measures the rate of return which the…
Q: Problem 14-70 (b) (LO. 8) Domingo has the following net § 1231 results for each of the years shown:…
A: Amount will be treated as an ordinary income until the recovery of previous outstanding loss.…
Q: YYYYMM Return(Stk1) Return(Stk2) Return(Market) Return(T-bill) 201701 7.75% 3.00% 6.18% 0.20% 201702…
A: The Capital Asset Pricing Model (CAPM) is a mathematical model that explains the relationship…
Q: States Probability Asset M Return Asset N Return Asset O Return Вoom 32% 13% 23% 5% Normal 50% 11%…
A: Portfolio Return = Return on asset M * 1/3 + Return on asset N * 1/3 + Return on asset O * 1/3…
Q: Exhibit 19.10 Empire Enterprises: Pro Forma Income Statement and Balance Sheet ($ millions) Income…
A: Formulas: EFN/(Excess cash) = (Initial assets*Growth rate) - Retained earnings
Q: 4. The corrected net income in 2020 a. P692,500 b. P709,500 c. P708,500 d. P690,500 5. The effect of…
A: Computation of Correct Net Income of 2020 Net Income before Adjustments 700000 Add: Prepaid…
Q: Residual Income $23000 Operating income 45,337 Cost of Capital 12% What is return on investment?…
A: The approach of residual income is the estimation of the overall gain that is earned by an…
Q: Years 2020 2019 Current Assets 11.68 9.51 Current Liabilities 9.95 8.66 Current Ratio 1.17 1.09…
A: Financial Ratio:- These ratios are used in the comparison of data and performance of the two years…
Q: Return on total assets ratio: net income/ average total assets 21,331/(321,195+225,248)/2= 0.07807=…
A: Introduction:- Return on assets ratio means as follows:- It is a profitability ratio It helps how…
Step by step
Solved in 3 steps
- Benefits of diversification. Sally Rogers has decided to invest her wealth equally across the following three assets. What are her expected returns and he risk from her investment in the three assets . How do they compare with investing in asset M alone. hint : Find he standard deviations of asset M and the portfolio equally invested in assets M, N, and O. Could Sally reduce her total risk even more by using assets M and O only, or assets N and O only. Use a 50/50 split between the asset pairs, and find the standard deviation of each asset pair. Please answer all questions with explanations and round to two decimal places. ThxSharon Smith, the financial manager for Barnett Corporation, wishes to select one of three prospective investments: X, Y, and Z. Assume that the measure of risk Sharon cares about is an asset's standard deviation. The expected returns and standard deviations of the investments are as follows: Investment Expected return Standard deviation X 17% 7% Y 17% 8% Z 17% 9% a. If Sharon were risk neutral, which investment would she select? Explain why. b. If she were risk averse, which investment would she select? Why? c. If she were risk seeking, which investments would she select? Why? d. Suppose a fourth investment, W, is available. It offers an expected return of 18%,and it has a standard deviation of 9%. If Sharon is risk averse, can you say which investment she will choose? Why or why not? Are there any investments that you are certain she will not choose?Darren is considering the following investments; Alphabet, PayZero and FNQ Res.: Probability of return (%) Likely Return Alphabet (%) Likely Return PayZero (%) Likely Return FNQ Res. (%) 20 6 4 9 30 9 7 14 40 16 10 19 10 18 14 26 a) Calculate the expected return for each asset. b) Calculate the expected return on a portfolio comprising each asset weighted as follows Asset Weighting (%) Weighting (%) Alphabet 20 PayZero 55 FNQ Res. 25 c) Explain to Darren the benefit of combining the assets into a portfolio instead of undertaking individual investments in Alphabet, PayZero and FNQ Res. d) Calculate the risk attached to each of the investments proposed in Alphabet, PayZero and FNQ Res. Rank each investment in regard to its risk and return. Discuss the likely range of returns that could eventuate for each asset with a 95% level of accuracy.
- Two assets, A and B, have the same expected return (10%) and the same level of risk (average). Which of the following statements is true? Select one: a. A rational investor will either put 100% of her funds into asset A or 100% of her funds into asset B because the return same but the investor will not have to track two separate investments. b. A combination of assets A and B will have the same expected return (10%) as either asset A or asset B, but may have less than average risk depending on how the cash flows from each asset move together. c. A rational investor is indifferent between investing 100% in A, 100% in B, or a combination of A and B, because the return and risk will be the same. d. A combination of assets A and B will result in the same expected return (10%) as investing 100% in A or 100% in B, but the risk will increase because now two investments are at risk.Benefits of diversification. What is the expected return of investing equally in all three assets M, N, and O? Find the standard deviations of asset M and of the portfolio equally invested in assets M, N, and O.Suppose you are considering investing your entire portfolio in three assets A, B and C. You expect that after you invest, four possible mutually exclusive scenarios will occur, with associated returns (in %) for each of the three assets as listed below. The probability of each scenario is given below (Attached image). Find the expected returns and standard deviations of Asset A, B & C. (HINT: the expected return is given by the probability-weighted sum of returns in each scenario. The expected standard deviation is given by the square root of the probability-weighted sum of squared deviations from the expected return.) Is there any reason to invest in Asset A given its low expected return and high standard deviation?
- Hailey has identified two companies, Urban Foodies and Wicked Chef, as possible investments. She has estimated the expected performance of the two companies under each of the following economic conditions as follows: Economic conditions Probability of the economic state occurring Rate of return of Urban Foodies Rate of return of Wicked Chef Recession. 0,20 −15% 20% Normal 0,50 20% 30% Boom. 0,30 60% 40% You are required to calculate the expected return of a portfolio consisting of 75% of Urban Foodies and 25% of Wicked Chef. 1. 25,00% 2. 26,50% 3. 32,00% 4. 45,50%Remember, the expected value of a probability distribution is a statistical measure of the average (mean) value expected to occur during all possible circumstances. To compute an asset’s expected return under a range of possible circumstances (or states of nature), multiply the anticipated return expected to result during each state of nature by its probability of occurrence. Consider the following case: Tyler owns a two-stock portfolio that invests in Celestial Crane Cosmetics Company (CCC) and Lumbering Ox Truckmakers (LOT). Three-quarters of Tyler’s portfolio value consists of CCC’s shares, and the balance consists of LOT’s shares. Each stock’s expected return for the next year will depend on forecasted market conditions. The expected returns from the stocks in different market conditions are detailed in the following table: Market Condition Probability of Occurrence Celestial Crane Cosmetics Lumbering Ox Truckmakers Strong 0.20 35% 49% Normal 0.35 21% 28%…(Computing the standard deviation for an individual investment) James Fromholtz is considering whether to invest in a newly formed investment fund. The fund's investment objective is to acquire home mortgage securities at what it hopes will be bargain prices. The fund sponsor has suggested to James that the fund's performance will hinge on how the national economy performs in the coming year. Specifically, he suggested the following possible outcomes: LOADING... . a. Based on these potential outcomes, what is your estimate of the expected rate of return from this investment opportunity? b. Calculate the standard deviation in the anticipated returns found in part a. c. Would you be interested in making such an investment? Note that you lose all your money in one year if the economy collapses into the worst state or you double your money if the economy enters into a rapid expansion. State of Economy Probability Fund Returns Rapid expansion and recovery…
- as the chief investment officer for a money management firm specializing in taxable individual investors, you are trying to establish a strategic asset allocation for two different clients. You have established that Ms. A has a risk-tolerance factor of 9, while Mr. B has a risk-tolerance factor of 27. The characteristics for four model portfolios follow: ASSET MIX Portfolio Stock bond ER σ2 1 9% 91% 8% 5% 2 21 79 9 9 3 69 31 10 14 4 84 16 11 24 Calculate the expected utility of each prospective portfolio for each of the two clients. Do not round intermediate calculations. Round your answers to two decimal places. Portfolio Ms. A Mr. B 1 2 3 4As the chief investment officer for a money management firm specializing in taxable individual investors, you are trying to establish a strategic asset allocation for two different clients. You have established that Ms. A has a risk-tolerance factor of 8, while Mr. B has a risk-tolerance factor of 27. The characteristics for four model portfolios follow: ASSET MIX Portfolio Stock Bond ER σ2 1 6 % 94 % 9 % 6 % 2 25 75 10 10 3 67 33 11 14 4 88 12 12 24 Calculate the expected utility of each prospective portfolio for each of the two clients. Do not round intermediate calculations. Round your answers to two decimal places. Portfolio Ms. A Mr. B 1 2 3 4 Which portfolio represents the optimal strategic allocation for Ms. A? Which portfolio is optimal for Mr. B? Portfolio represents the optimal strategic allocation for Ms. A. Portfolio is the optimal allocation for Mr. B. For Ms. A, what level of…Remember, the expected value of a probability distribution is a statistical measure of the average (mean) value expected to occur during all possible circumstances. To compute an asset’s expected return under a range of possible circumstances (or states of nature), multiply the anticipated return expected to result during each state of nature by its probability of occurrence. Consider the following case: Aaron owns a two-stock portfolio that invests in Happy Dog Soap Company (HDS) and Black Sheep Broadcasting (BSB). Three-quarters of Aaron’s portfolio value consists of HDS’s shares, and the balance consists of BSB’s shares. Each stock’s expected return for the next year will depend on forecasted market conditions. The expected returns from the stocks in different market conditions are detailed in the following table: Market Condition Probability of Occurrence Happy Dog Soap Black Sheep Broadcasting Strong 0.50 30% 42% Normal 0.25 18% 24% Weak 0.25 -24% -30%…