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Dr. PLUTO , a young CEO of the NINO Bank holds a Ph.D., degree with specialization in Corporate Finance from the
Dr. "PLUTO", a young CEO of the "NINO" Bank holds aPh.D.,degree with specialization in Corporate Finance from the "Donald Duck" University. On April 6, 2021 Dr.PLUTOwould deliver a lecture for the "ZZZ" Finance Association at the "Banana" State University.
Please assist him/her by employing Table 1 below to compute the following variables:
TABLE 1
TIMER [WF]R [BOA]R [Market]Probability
201814%25%28%0.35
201915%18%26%0.15
202020%19%24%0.20
202124%22%32%0.30
Assume that the Risk-Free Rate is 5%
- Calculate the Expected Returns.
- Calculate the Variances.
- Calculate the Risks.
- Calculate the Covariances.
- Calculate the Betas and comment analytically.
- Calculate the Coefficients of Variation.
- Calculate the Correlation Coefficients.
- Calculate the Sharpe's ratio and comment analytically.
- Calculate the Treynor's ratio and comment analytically.
- Draw the SML and the CML, respectively.
- Calculate using theCAPM Modelthe Returns for WF and BOA, respectively.
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