You have invested in a portfolio consisting of Shares C, D and E. The following table shows the amount of money you invested in each share, and the realised return from each share over the past year. What was the realised return on the portfolio? Share Amount Invested Realised Return $370 3.54% $480 11.53% E $610 15.57% O a. 8.6531% O b. 9.2231% O c. 11.1931%

You have invested in a portfolio consisting of Shares C, D and E. The following table shows the amount of money you invested in each share, and the realised return from each share over the past year. What was the realised return on the portfolio? Share Amount Invested Realised Return $370 3.54% $480 11.53% E $610 15.57% O a. 8.6531% O b. 9.2231% O c. 11.1931%

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter8: Risk And Rates Of Return

Section: Chapter Questions

Problem 10PROB

See similar textbooks

Similar questions

What makes for a good investment? Use the approximate yield formula or a financial calculator to rank the following investments according to their expected returns. Buy a stock for $30 a share, hold it for three years, and then sell it for $60 a share (the stock pays annual dividends of $2 a share). Buy a security for $40, hold it for two years, and then sell it for $100 (current income on this security is zero). Buy a one-year, 5 percent note for $1,000 (assume that the note has a $1,000 par value and that it will be held to maturity).
Stock A and Stock B have the following historical returns: Year Stock A’s Returns, Stock B’s Returns, 1 –10.00% –23.00% 2 18.50 21.29 3 38.67 44.25 4 14.33 3.67 5 33.00 28.30 Calculate the average rate of return for each stock during the period given in the table. Assume that someone held a portfolio consisting of 50 percent Stock A and 50 percent Stock B. What would have been the realized rate of return on the portfolio in each year? What would have been the average return on the portfolio during this period? Calculate the standard deviation of returns for each stock and for the portfolio. Looking at the annual returns data on the two stocks, would you guess that the correlation coefficient between…
Stock A and Stock B have the following historical returns: Year Stock A’s Returns, Stock B’s Returns, 1 –10.00% –23.00% 2 18.50 21.29 3 38.67 44.25 4 14.33 3.67 5 33.00 28.30 Calculate the average rate of return for each stock during the period given in the table. Assume that someone held a portfolio consisting of 50 percent Stock A and 50 percent Stock B. What would have been the realized rate of return on the portfolio in each year? What would have been the average return on the portfolio during this period? Calculate the standard deviation of returns for each stock and for the portfolio
You are considering an investment in either individual stocks or a portfolio of stocks. The two stocks you are researching, Stock A and Stock B, have the following historical returns: Year rA rB 2014 -20.00% -5.00% 2016 42.00 15.00 2017 20.00 -13.00 2018 -8.00 50.00 2019 25.00 12.00 a. Calculate the average rate of return for each stock during the 5-year period. b. Suppose you had held a portfolio consisting of 50% of Stock A and 50% of Stock B. What would have been the realized rate of return on the portfolio in each year? What would have been the average return on the portfolio during this period? c. Calculate the standard deviation of returns for each stock and for the portfolio. d. Suppose you are a risk-averse investor. Assuming Stocks A and B are your only choices, would you prefer to hold Stock A, Stock B, or the portfolio? Why?
Stocks A and B have the following historical returns:Year Stock A’s Returns, rA Stock B’s Returns, rB2003 (18%) (24%)2004 44 242005 (22) (4)2006 22 82007 34 56a. Calculate the average rate of return for each stock during the 5-year period.Assume that someone held a portfolio consisting of 50% of Stock A and 50%of Stock B. What would have been the realized rate of return on the portfolioin each year? What would have been the average return on the portfolio duringthis period?b. Now calculate the standard deviation of returns for each stock and for theportfolio. Use Equation 6-5.c. Looking at the annual returns data on the two stocks, would you guess thatthe correlation coefficient between returns on the two stocks is closer to 0.8 orto 0.8?d. If you added more stocks at random to the portfolio, which of the followingis the most accurate statement of what would happen to p?(1) p would remain constant.(2) p would decline to somewhere in the vicinity of 20%.(3) p would decline to…
A portfolio consists of $15,000 in Stock M and $22,900 invested in Stock N. The expected return on these stocks is 8.80 percent and 12.40 percent, respectively. What is the expected return on the portfolio?
What return do you expect on a portfolio next year that is currently invested 15% in your stock (with an expected return as computed in c.1 (8.06%) ) and 85% in an equity mutual fund (which is an investment company that invests into stocks for investors) that has a CAPM expected return of 8.52%?
Required: a. The expected returns for stock A and stock B b. The standard deviation of stock A and stock B's returns. c. Assume that you invest 40% of your wealth in stock A and 60% of your wealth in the S&P 500. Calculate the expected return of your portfolio.
Stocks A and B have the following historical returns: Year Stock A return Stock B return 2004 (24.25%) 5.5% 2005 18.5% 26.73% 2006 38.67% 48.25% 2007 14.33% (4.5%) 2008 39.13% 43.86% Calculate the average rate of return for each stock during the period 2004 through 2008. Assume that someone held a portfolio consisting of 50% of Stock A and 50% of Stock What would the realized rate of return on the portfolio have been in each year from 2004 through 2008? What would the average return on the portfolio have been during that period? Calculate the standard deviation of returns for each stock and for the portfolio.
Stocks A and B have the following historical returns: Year Stock A return Stock B return 2004 (24.25%) 5.5% 2005 18.5% 26.73% 2006 38.67% 48.25% 2007 14.33% (4.5%) 2008 39.13% 43.86% Calculate the average rate of return for each stock during the period 2004 through 2008. Assume that someone held a portfolio consisting of 50% of Stock A and 50% of Stock What would the realized rate of return on the portfolio have been in each year from 2004 through 2008? What would the average return on the portfolio have been during that period?
You have a portfolio worth $78,500 that has an expected return of 11.9 percent. The portfolio has $17,500 invested in Stock O, $25,300 invested in Stock P, with the remainder in Stock Q. The expected return on Stock O is 18.7 percent and the expected return on Stock P is 11.9 percent. What is the expected return on Stock Q?