QUESTION 14Use the table below to answer questions 12 through 15.Portfolio A's Return (%)2.150.891.15-0.471.710.101.042.700.662.15-1.38-0.59MonthJanuaryFebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecemberBenchmark Index Return (%)1.65-0.100.52-0.600.650.33active strategyC. need more information to answer the question2.311.101.232.02-0.61-1.20What can you say about the investment management strategy pursued by this portfolio manager?A. passive strategyB.

There are basically two strategies used by the fund managers one is to match the market and other is…

Use the table below to answer questions 12 through 15. Portfolio A's Return (%) 2.15 0.89 1.15 -0.47 1.71 0.10 1.04 2.70 0.66 2.15 -1.38 Month January February March April May June July August September October November Benchmark Index Return (%) 1.65 -0.10 0.52 -0.60 0.65 0.33 2.31 1.10 1.23 2.02 -0.61

Use the table below to answer questions 12 through 15. Portfolio A's Return (%) 2.15 0.89 1.15 -0.47 1.71 0.10 1.04 2.70 0.66 2.15 -1.38 Month January February March April May June July August September October November Benchmark Index Return (%) 1.65 -0.10 0.52 -0.60 0.65 0.33 2.31 1.10 1.23 2.02 -0.61

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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QUESTION 9 Use the data in the table shown below. What is the geometric average return over the span of three years? Date 12/31/2018 12/31/2019 12/31/2020 12/31/2021 O a. 28.7% O b.7.5% c.9.5% O d. 8.9% Price $43.00 $45.60 $42.60 $52.50 Dividend $0.80 $0.80 $0.90
What is Stock X's geometric returns if it has the following returns? Year 1 8% Year 2 - 5% Year 3 10% Year 4 - 6% Year 5 15% a. 4.1%. b. 5.2% c. 6.8% d. 8.5%
QUESTION 12 Use the table below to answer questions 12 through 15. What is the portfolio tracking error? O A. 81.35 basis points OB. 86.35 basis points O C. 83.35 basis points D. 80.35 basis points Month January February March April May June July August September October November December Portfolio A's Return (%) 2.15 0.89 1.15 -0.47 1.71 0.10 1.04 2.70 0.66 2.15 -1.38 -0.59 Benchmark Index Return (%) 1.65 -0.10 0.52 -0.60 0.65 0.33 2.31 1.10 1.23 2.02 -0.61 -1.20
financial advisor evaluates four stocks for inclusion in an investor's portfolio. A orrelation matrix showing each stock's correlation with the other stocks is shown below Stock ALK CMN BTY DLE ALK 0.40 0.58 1.00 -0.25 BTY 0.40 1.00 0.16 -0.04 CMN -.25 .16 1.00 .37 DLE .58 .04 .37 1.00 f the goal is to reduce the investor's overall portfolio risk, which two stocks should the advisor recommend? a. ALK and DLE b. ALK and CMN c. BTY and DLE BTY and CM
Q2 - Returns on stocks X and Y are listed below: Period 1 2 3 4 5 6 7Stock X 4% -2% 5% -1% 10% 7% 12%Stock Y -3% 7% 4% 2% 2% 8% -3% Consider a portfolio of 10% stock X and 90% stock Y. What is the mean of portfolio returns? Please specify your answer in decimal terms and round your answer to the nearest thousandth (e.g., enter 12.3 percent as 0.123).
Securities A B C D E 4 Select one: OA. 2.50% O B. 3.73% OC. 1.98% Expected Standard Return (in %) Deviation of with 4.11 15.55 8.12 8.20 12.50 O D. 2.79% Correlation Beta 19 36.7 10 24.5 14 Returns (in %) Portfolio Market 0.56 0.78 0.42 0.99 The standard deviation of the returns on the market portfolio is 15%, and its expected return is 9.5%. The riskless asset has a return of 2.5%. Which of the following results is closest to the unsystematic risk of a portfolio comprised of 60% of security A and 40% of security B given that the correlation between security A and B (P(A,B)) is 0.4? 0.23 1.37 0.52 0.68 0.92
Accounting Use the following information: Stock A B Good state 12% 17% Bad state 0% -1% Assume there is 60% probability that the good state occurs and 40% chance the bad state occurs. What is the expected return of a portfolio that is 9% invested in stock A and 1-9% invested in B? (Please use 5 decimal places, this should be written in percentage return, so an answer of 23.143% should be written at .23143)
What is the expected return for the following portfolio? (State your answer in percent with two decimal places.) Stock Expected returns Investment AAA 35% $500,000 BBB 29% $1,300,000 CCC 18% $1,200,000 DDD 7% $1,500,000 O.17.13% O.19.40% O.21.01% O.22.21% O.23.88%
Covariance with Mean Return Stock AOL Microsoft Intel AOL .002 .001 15% Microsoft .001 .002 .001 12 Intel 001 .002 10 5.2. Compute the tangency portfolio weights assuming a risk-free asset yields 5 percent.
State of Economy Probability ABC Company Expected Return Expected Return XYZ Company Very Poor 0.30 -9% -19% Poor 0.25 -8% -6% Good 0.15 8% 9% Very Good 0.30 34% 33% Expected Return 6.70% 4.05% A) Calculate the covariance of the portfolio. Please answer as a decimal to 4 decimal places. Answer:
A B с E F Investment Opportunity set for stocks and bonds with varios correlation coeffients SD s SDB 19 8 E(rs) 10 Weight in stocks WS -0.1 0.0 0.1 0.2 0.3 0.4 0.6 0.8 1.0 1.1 D E(TB) 5 Portfolio expected return ws(min) = (GB^2 - OBOSP) / (Os^2 + B^2 - 2*0BÚSP) E(rp) = ws(min) *E(rs)+(1-wg(min))*E(rb) = SDp = G -1 Portfolio Standard Deviation for Given Correlation 0 0.2 0.5 H Minimum Variance Portfolio 1
QUESTION 3 – Risk and ReturnSintok Corporation has collected information on the following three investments. Which investment is the most favourable based on the information presented?Stock A Stock B Stock CProbability Return Probability Return Probability Return0.15 2% 0.25 -3% 0.1 -5%0.4 7% 0.5 20% 0.4 10%0.3 10% 0.25 25% 0.3 15%0.15 15% 0.2 30%

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