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I need help with getting the answers Q1) There is a 22.80% probability of a below average economy and a 77.20% probability of an average
I need help with getting the answers
Q1) There is a 22.80% probability of a below average economy and a 77.20% probability of an average economy. If there is a below average economy stocks A and B will have returns of 9.10% and 14.50%, respectively. If there is an average economy stocks A and B will have returns of 16.90% and 3.10%, respectively. Compute the: a) Expected Return for Stock A(0.75 points): b) Expected Return for Stock B ( 0.75 points): c) Standard Deviation for Stock A ( 0.75 points): d) Standard Deviation for Stock B ( 0.75 points): Q2) There is a 31.40% probability of an average economy and a 68.60% probability of an above average economy. You invest 32.00% of your money in Stock S and 68.00% of your money in Stock T. In an average economy the expected returns for Stock S and Stock T are 5.30% and 11.10%, respectively. In an above average economy the the expected returns for Stock S and T are 30.70% and 13.60%, respectively. What is the expected return for this two stock portfolio? ( 2 points) Q3) You are invested 40.00% in growth stocks with a beta of 1.96,12.60% in value stocks with a beta of 0.53, and 47.40% in the market portfolio. What is the beta of your portfolio? (1 point) Q4) An analyst gathered the following information for a stock and market parameters: stock beta =1.15; expected return on the Market =8.90%; expected return on T-bills =4.50%; current stock Price =$7.60; expected stock price in one year =$12.34; expected dividend payment next year = \$2.26. Calculate the a) Required return for this stock (1 point): b) Expected return for this stock (1 point): Q5) The market risk premium for next period is 4.70% and the risk-free rate is 4.00%. Stock Z has a beta of 1.08 and an expected return of 14.60%. What is the: a) Market's reward-to-risk ratio? (1 point): b) Stock Z's reward-to-risk ratio (1 point)Step by Step Solution
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