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Bartman Industries's and Reynolds Inc.'s stock prices and dividends, along with the Winslow 5000 Index, are shown here for the period 20152020. The Winslow 5000
Bartman Industries's and Reynolds Inc.'s stock prices and dividends, along with the Winslow 5000 Index, are shown here for the period 20152020. The Winslow 5000 data are adjusted to include dividends. b. Calculate the standard deviations of the returns for Bartman, Reynolds, and the Winslow 5000 . (Hint: Use the sample standard deviation formula, which corresponds to the STDEV.S function in Excel.) Round your answers to two decimal places. c. Calculate the coefficients of variation for Bartman, Reynolds, and the Winslow 5000 . Round your answers to two decimal places. d. Assume the risk-free rate during this time was 4%. Calculate the Sharpe ratios for Bartman, Reynolds, and the Index over this average returns. Round your answers to four decimal places. places. Bartman's beta: Reynolds's beta: Are these betas consistent with your graph? These betas are v consistent with the scatter diagrams. good estimate of the market's required return-it is too high. So use 10% as the expected return on the market. Use the calculate the two companies' required returns. Round your answers to two decimal places. Bartman's required return: % Reynolds's required return: % h. If you formed a portfolio that consisted of 50% Bartman and 50% Reynolds, what would the portfolio's beta and required return ber answer for the portfolio's beta to four decimal places and for the portfolio's required return to two decimal places. Portfolio's beta: Portfolio's required return: % i. Suppose an investor wants to include Bartman Industries's stock in his portfolio. Stocks A, B, and C are currently in the portfolio, and their betas are 0.848,0.972, and 1.417, respectively. Calculate the new portfolio's required return if it consists of 25% of Bartman, 15% of Stock A,40% of Stock B, and 20% of Stock C. Round your answer to two decimal places. %
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