1443*

1445*

Risk and probability Micro-Pub, Inc. is considering the purchase of one of two digital cameras, R and S, each of which requires an initial investment of $2,000 Management has constructed the following table of estimates of rates of return and probabilities for pessimistic, most likely and optimistic results: a. Determine the range for the rate of return for each of the two cameras. b. Determine the value of the expected retum for each camera C. Which camera purchase is riskier? Why? HIB a. The range for the rate of return for camera Ris%(Round to the nearest whole number.) Data table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Camera R Amount Probability $2.000 1.00 Camera S Amount Probability $2,000 1.00 Initial investment Annual rate of return Pessimistic Most likely Optimistic 18% 25% 32% 0.21 0.55 0.24 1796 2896 30% 0.18 0.57 0.25 6 Portfolio weights You have a small portfolio of fast food restaurants consisting of Chipotle (CMG). McDonalds (MCD). Shake Shack (SHAK), and Wendy's (WEN). Use the following information to answer the questions. a. How much do you have invested in each stock? b. What is the total value of your portfolio? c. What are the security weights for your portfolio? TIE a. The amount you have invested in CMG is $. (Round to the nearest cent) Data table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet) Ticker CMG MCD SHAK WEN Price $901.51 S188.79 $52.29 $21.95 Shares 13 16 39 43