Answered step by step
Verified Expert Solution
Question
1 Approved Answer
09) There is a 21.29% probability of a below-average economy and a 78.71% probability of an average economy. If there is a below-average economy, Stocks
09) There is a 21.29% probability of a below-average economy and a 78.71% probability of an average economy. If there is a below-average economy, Stocks A and B will have returns of -3.93% and -3.82%, respectively. If there is an average economy, Stocks A and B will have returns of 16.32% and 6.24%, respectively. Compute the following for Stocks A and B: a) Stock A Expected Return : (1 point) b) Stock B Expected Return : (1 point) c) Stock A Standard Deviation : (1.5 points) d) Stock B Standard Deviation : (1.5 points) . 010) There is a 31.61% probability of an average economy and a 68.39% probability of an above average economy. You invest 42.67% of your money in Stock Sand 57.33% of your money in Stock T. In an average economy the expected returns for Stock S and Stock T are 7.57% and 14.70%, respectively. In an above average economy the the expected returns for Stock S and T are 27.33% and 13.81%, respectively. What is the expected return for this two stock portfolio? (2.0 points) Q11) You are invested 34.26% in growth stocks with a beta of 1.958 , 21.63% in value stocks with a beta of 1.065, and 44.11% in the market portfolio. What is the beta of your portfolio? (1.0 points) = Q12) An analyst gathered the following information for a stock and market parameters: stock beta = 1.251; expected return on the Market = 11.59%; expected return on T-bills = 1.09%; current stock Price = $6.41 ; expected stock price in one year= $9.49 ; expected dividend payment next year = $1.81. Calculate the required return and expected return for this stock. a) Required Return : (1.0 points) b) Expected Return : (1.0 points)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started