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Joshua owns a two-stock portfollo that invests in Celestial Crane Cosmetics Company (CCC) and Lumbering Ox Truckmakers (LOT). Three-quarters of Joshua's portfolio value conslats of

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Joshua owns a two-stock portfollo that invests in Celestial Crane Cosmetics Company (CCC) and Lumbering Ox Truckmakers (LOT). Three-quarters of Joshua's portfolio value conslats of CCC's shares, and the balance conslats of Lor's shares. Each stock's expected return for the next year will depend on forecasted market conditions, The expected returns from the stocks in different market conditions are detailed in the following table: Calculate expected returns for the individual stocks in Joshua's portfoso as well as the expected rate of return of the entire portfolio over the three possible market conditions next year. - The expected rate of return on Celestial Crane Cosmetics's stock over the next year is - The expected rate of return on Lumbering Ox. Truckmakers's stock over the next year is - The expected rate of return on Joshua's portfolio over the next year is The expected returns for Joshua's portfolio were calculated based on three possible conditions in the market. Such conditions will vary from time to time, and for each condition there will be a specific outcome. These probsbilities and outcomes can be represented in the form of a continuous probability distnbution graph. For example, the continuous probability distributions of rates of return on stocks for two different companies are shown on the following graph: Quantitative Problem: You are given the following information for Wine and Cork Enterprises (WCE): rN=4%;RN=10%;RPin=6%,andbeta=1.1 What is wCE's required rate of return? Do not round intermediate calculations. Round your answer to two dedmal places. If inflation increases by 2% but there is no change in invistors' risk aversion, what is wCE's required rate of retum now? Do not round intermediate calculations. Round your answer to two decimal places. Assume now that there is no change in infation, but risk aversion increases by 2%. What is Wcr's required rate of return now? Do not round intermediate calculasions. Round you answer to two decimal places. If inflaton increases by 2% and risk aversion increases by 2%, what is WCEs required rate of retum now? Do not round intermedate calculations, Round your answer to two decimal places. \% time, and for each condition there will be a specific outcome. These probabilities and outcomes can be represented in the form of a continucus probability distribution graph. For example, the continuous probability distributions of rates of return on stocks for two different companies are shown on the following graph Based on the graph's information, which company's returns exhibit the greater risk? Company H Company G Joshua owns a two-stock portfollo that invests in Celestial Crane Cosmetics Company (CCC) and Lumbering Ox Truckmakers (LOT). Three-quarters of Joshua's portfolio value conslats of CCC's shares, and the balance conslats of Lor's shares. Each stock's expected return for the next year will depend on forecasted market conditions, The expected returns from the stocks in different market conditions are detailed in the following table: Calculate expected returns for the individual stocks in Joshua's portfoso as well as the expected rate of return of the entire portfolio over the three possible market conditions next year. - The expected rate of return on Celestial Crane Cosmetics's stock over the next year is - The expected rate of return on Lumbering Ox. Truckmakers's stock over the next year is - The expected rate of return on Joshua's portfolio over the next year is The expected returns for Joshua's portfolio were calculated based on three possible conditions in the market. Such conditions will vary from time to time, and for each condition there will be a specific outcome. These probsbilities and outcomes can be represented in the form of a continuous probability distnbution graph. For example, the continuous probability distributions of rates of return on stocks for two different companies are shown on the following graph: Quantitative Problem: You are given the following information for Wine and Cork Enterprises (WCE): rN=4%;RN=10%;RPin=6%,andbeta=1.1 What is wCE's required rate of return? Do not round intermediate calculations. Round your answer to two dedmal places. If inflation increases by 2% but there is no change in invistors' risk aversion, what is wCE's required rate of retum now? Do not round intermediate calculations. Round your answer to two decimal places. Assume now that there is no change in infation, but risk aversion increases by 2%. What is Wcr's required rate of return now? Do not round intermediate calculasions. Round you answer to two decimal places. If inflaton increases by 2% and risk aversion increases by 2%, what is WCEs required rate of retum now? Do not round intermedate calculations, Round your answer to two decimal places. \% time, and for each condition there will be a specific outcome. These probabilities and outcomes can be represented in the form of a continucus probability distribution graph. For example, the continuous probability distributions of rates of return on stocks for two different companies are shown on the following graph Based on the graph's information, which company's returns exhibit the greater risk? Company H Company G

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