Suppose we want to determine the expected return and standard deviation for a portfolio of assets A (60%) and B (40%). The expected returns of assets A and B for each of the next 5 years are given in columns 1 and 2 respectively in the table. Find the expected return and standard deviation for the portfolio. Years A B 2018 10% 6% 2019 15% 8% 2020 12% 10% 2021 9% 7% 2022 14% 9%
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Suppose we want to determine the expected return and standard deviation for a portfolio of assets A (60%) and B (40%). The expected
Years A B
2018 10% 6%
2019 15% 8%
2020 12% 10%
2021 9% 7%
2022 14% 9%
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- Assume you are considering a portfolio containing Asset 1 and Asset 2. Asset 1 will represent 37% of the dollar value of the portfolio, and asset 2 will account for the other 63%. Assume that the portfolio is rebalanced at the end of each year. The expected returns over the next 6 years, 2021–2026, for each of these assets are summarized in the following table: Data table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Projected Return Year Asset L Asset M 2021 −9% 33% 2022 15% 5% 2023 26% −9% 2024 4% 18% 2025 −9% 33% 2026 33% −18% . a. Calculate the expected portfolio return, rp, for each of the 6 years. b. Calculate the average expected portfolio return, rp, over the 6-year period. c. Calculate the standard deviation of expected portfolio returns, sp, over…Below are the annual returns provided by TSCM. Calculate average annual return experienced by an investor over the last five years. Calculate the standard deviation of the portfolio return over this period. (See sheet "TSCM" in the attached Excel.) Period Return 2021 -51.0% 2020 43.0% 2019 61.0% 2018 -5.0% 2017 -19.0% In the year 2022, TSCM return is 21%. Calculate TSCM's Jensen's Alpha for the year period in annual terms. Use the below data. Beta = 2.3 Risk-free rate = 1% Expected Market Return = 8%You had the following rates of return for on your portfolio for the last four years: 2019: -10.1%2020: 15.4%2021: 7.3%2022: 12.8%Calculate the geometric average return on your portfolio. Enter your answer as a decimal, rounded to four decimal places.
- Jamie Wong is thinking of building an investment portfolio containing two stocks, L and M. Stock L will represent 20%of the dollar value of the portfolio, and stock M will account for the other 80%. The historical returns over the next 6 years, 2013−2018, for each of these stocks are shown in the following table: ( see attached table a. Calculate the actual portfolio return, rp, for each of the 6 years. b. Calculate the expected value of portfolio returns, rp, over the 6-year period. c. Calculate the standard deviation of expected portfolio returns, σrp, over the 6-year period. d. How would you characterize the correlation of returns of the two stocks L and M? e. Discuss any benefits of diversification achieved by Jamie through creation of the portfolio.Jamie Wong is thinking of building an investment portfolio containing two stocks, L and M. Stock L will represent 50% of the dollar value of the portfolio, and stock M will account for the other 50%. The historical returns over the next 6 years, 2013−2018,for each of these stocks are shown in the following table: (see attached table) a. Calculate the actual portfolio return, rp, for each of the 6 years. b. Calculate the expected value of portfolio returns, rp, over the 6-year period. c. Calculate the standard deviation of expected portfolio returns, σrp, over the 6-year period.Assuming the below annual rates of return: Annual Rates of Return: Wamart - 12.36% Coca Cola - 25.51% Pfizer - 14% CVS - 32.99% Berkshire Hathaway - 29.66% Assume that you initially invested $1,000,000 in the portfolio and that the distribution of the annual rate of return of the portfolio is normal. What is the distribution of the return of the portfolio 20 years after its formation? Provide the graph of the distribution of the return of the portfolio.
- Using the information below to calculate the following monthly returns for the portfolio. a. Time Weighted Return b. Money Weighted Return c. Discuss the usefulness of above returns when evaluating the performance of the investment portfolio over a given time period. Assume all investments/withdrawals are made at the beginning of the month Month Return Investment January 5% 10000 February 3% March 3% April 7% May -6% 5000 June 2% July 2% August -9% September 7% -5000 October -4% November 2% December -2%You hold an equally-weighted (half invested in each) portfolio consisting of two stocks A and B, whose returns for the past three years are given below. Year Stock A Stock B 2018 24% -8% 2019 -4% 20% 2020 10% 6% What are the average return and standard deviation of your portfolio AB? Average return is %, standard deviation is %. Round your answer to a whole number, e.g., x or xx. (Hint: Think of portfolio return each year.)An investment advisor has recommended a R50,000 portfolio containing assets R, J, and K; R25,000 will be invested in asset R, with an expected annual return of 12 percent; R10,000 will be invested in asset J, with an expected annual return of 18 percent; and R15,000 will be invested in asset K, with an expected annual return of 8 percent. What is the expected annual return of this portfolio? What is the correct answer? A. 12.01% B. 12.00% C. 11.98% D. 12.93%
- A portfolio manager plans to invest 1,000,000 TL in an investment with 22% return for the first 2 years and 25% for the following 5 years. Accordingly, calculate the cumulative value of the investment at the end of 7 years? ThanksYour portfolio had the values in the following table for the four years listed: Data table (Click on the icon here in order to copy its contents of the data table below into a spreadsheet.) Beginning Value Ending Value 2016 $59,462 $55,536 2017 55,536 64,852 2018 64,852 67,183 2019 67,183 70,997 . a. Calculate your return for each year over the 4-year period. Then calculate the average return over the 4-year period. b. Calculate the portfolio standard deviation. Question content area bottom Part 1 The return for 2016 is enter your response here%. (Round to two decimal places.)Jamie Wong is thinking of building an investment portfolio containing two stocks, L and M. Stock L will represent 40% of the dollar value of the portfolio, and stock M will account for the other 60%. The historical returns over the last 6 years, 2013–2018, for each of these stocks are shown in the following table. Expected return. Year Stock L Stock M 2013 14 20 2014 14 18 2015 16 16 2016 17 14 2017 17 12 2018 19 10 A. Calculate the actual portfolio return,, for each of the 6 years. B. Calculate the average return for each stock and for the portfolio over the 6-year period. C. Calculate the standard deviation of returns for each asset and for the portfolio. How does the portfolio standard deviation compare to the standard deviations of the individual assets? D. How would you characterize the correlation of returns of the two stocks L and M? E. Discuss any benefits of diversification achieved by Jamie through creation of the portfolio.
