Calculate the expected rate of return for Franchise B Repeat all the steps used to answer Question 1 Based on this information alone would you invest in Franchise A or B 1F) Calculate the standard deviation for Franchise B Repeat all the steps used to answer Question 2 Based on this information alone would you invest in Franchise A or B 1G) Calculate the Coefficient of Variation for Franchise B Repeat all the steps to answer question 3 Which Franchise would you invest in 1H) Calculate the Expected rate of return for Portfolio A Start by calculating the Weight In E22 write Weight In E23 write B23 $B$28 Drag the equation down to E27 This equation will determine how much of the total portfolio investment is held in each individual stock Next calculate the weighted returns for each stock In F22 write Weight x Return In F23 write C23 E23 Drag the equation down to F27 Last calculate the expected rate of return In F28 write SUM(F23 F27) 1I) Imagine you are thinking of investing $300M in Stock F with a rate of return of 9 5 Should you do it Copy and paste your working to the cells below Add Stock F Right click on the row number of directly below Stock E on your pasted table Select insert Write 300 in the investment column and 9 5 for the rate of return column Check your equations are linked to the correct cells Copy pasting and adding rows may have moved your equations Did the expected rate of return increase or decrease when adding the stock 1J) Calculate the Portfolio Beta for Portfolio A Calculate the weighted Beta of each stock In G22 write Beta x Weight In G23 write E23 D23 Drag the equation down to E27 Calculate the Portfolio Beta In G28 write SUM(G23 G27 1K) and one extra tricky one Imagine you could sell stock C and purchase another stock for $220M, what beta would the replacement asset need to lower the portfolio Beta to exactly 1 (You do not need to answer this question to get full marks for the assignment)

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Calculate the expected rate of return for Franchise B Repeat all the steps used to answer Question 1 Based on this information alone would you

Calculate the expected rate of return for Franchise B

Repeat all the steps used to answer Question 1
Based on this information alone would you invest in Franchise A or B?

1F) Calculate the standard deviation for Franchise B

Repeat all the steps used to answer Question 2
Based on this information alone would you invest in Franchise A or B?

1G) Calculate the Coefficient of Variation for Franchise B

Repeat all the steps to answer question 3
Which Franchise would you invest in?

1H) Calculate the Expected rate of return for Portfolio A

Start by calculating the Weight
1. In E22 write Weight
2. In E23 write [=B23/$B$28]
3. Drag the equation down to E27
4. This equation will determine how much of the total portfolio investment is held in each individual stock
Next calculate the weighted returns for each stock.
1. In F22 write Weight x Return
2. In F23 write [=C23*E23]
3. Drag the equation down to F27
Last calculate the expected rate of return
1. In F28 write [=SUM(F23:F27)]

1I) Imagine you are thinking of investing $300M in Stock F with a rate of return of 9.5. Should you do it?

Copy and paste your working to the cells below.
Add Stock F
1. Right click on the row number of directly below Stock E on your pasted table
2. Select insert
3. Write 300 in the investment column and 9.5 for the rate of return column.
1. Check your equations are linked to the correct cells. Copy pasting and adding rows may have moved your equations.

1. Did the expected rate of return increase or decrease when adding the stock?

1J) Calculate the Portfolio Beta for Portfolio A

1. Calculate the weighted Beta of each stock.
  1. In G22 write Beta x Weight
  2. In G23 write [=E23*D23]
  3. Drag the equation down to E27
2. Calculate the Portfolio Beta
  1. In G28 write [=SUM(G23:G27}]

1K) and one extra tricky one: Imagine you could sell stock C and purchase another stock for $220M, what beta would the replacement asset need to lower the portfolio Beta to exactly 1? (You do not need to answer this question to get full marks for the assignment).