Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

d. Determine the Sharpe ratios of companies from average returns and a risk-free rate of 4%. (9 marks) e. Make a scatterplot showing the returns

d. Determine the Sharpe ratios of companies from average returns and a risk-free rate of 4%. (9 marks)

e. Make a scatterplot showing the returns of Power Electric Industries and Rviera Power Inc. on the vertical axis and the returns of Nature Energy Corp. on the horizontal axis. (12 points)

f. Calculate the percentage of volatility (betas) of the companies Power Electric Industries and Riviera Power Inc. by making regressions from the returns. Compare the results with those reflected in the graph from the previous question. (Value: 12 points)

g. Determines the percent volatility (beta) and return for a portfolio comprised of 40% Power Electric Industries and 30% Riviera Power Inc. and Nature Energy Corp., respectively. (12 points)

image text in transcribed Power, Electric Nature Riviera Power Inc. Industries Energy Corp. Year Stock price Dividends Stock price Dividends Stock price Dividends 2019 $18.5 $1.50 $38.5 $4.50 $58.5 $3.50 2018 $15.93 $1.10 $40.93 $3.10 $50.93 $2.10 2017 $10.20 $1.00 $43.20 $3.00 $53.20 $3.00 2016 $9.80 $0.90 $50.80 $2.90 $50.80 $2.90 2015 $8.50 $0 85 $48.50 $2.85 $48.50 $2.75 2014 $8.00 $0.80 $45.00 $2.80 $45.00 $2.60

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Asymmetric Cost Behavior Implications For The Credit And Financial Risk Of A Firm

Authors: Kristina Reimer

1st Edition

3658228210, 9783658228217

More Books

Students also viewed these Accounting questions

Question

What is the work environment like? Friendly/collegial?

Answered: 1 week ago

Question

Describe the major barriers to the use of positive reinforcement.

Answered: 1 week ago