Kindly Solve these questions. Please
Apex Footwear and Brac Bank Ltd.'s stock prices and dividends, along with the Dhaka Stock Exchange (DSE) Index, are shown here for the period 2015-2020. The DSE Index data are adjusted to include dividends. Data as given in the problem are shown below: Brac Bank Ltd. Year 2020 2019 2018 2017 2016 2015 Apex Footwear Ltd. Stock Price Dividend Tk. 31.250 Tk. 1.600 33.550 2.500 31.400 1.540 32.350 1.750 31.375 2.766 34.625 1.600 Stock Price Tk. 55.750 54.300 51.750 54.000 52.500 53.750 Dividend Tk. 2.500 2.500 4.550 3.650 2.300 1.600 Market Index Includes Divs. 9,650.98 7,584.70 8,192.98 6,244.03 4,524.28 5,447.00 3. Use the data given to calculate annual returns for Apex Footwear, Brac Bank, and the Market Index, and then calculate average returns over the five-year period. (Hint: Remember, returns are calculated by subtracting the beginning price from the ending price to get the capital gain or loss, adding the dividend to the capital gain or loss, and dividing the result by the beginning price. Assume that dividends are already included in the index. Also, you cannot calculate the rate of return for 2015 because you do not have 2014 data.) b. Calculate the standard deviation of the returns for Apex Footwear, Brac Bank, and the Market Index. (Hint: Use the sample standard deviation formula given in the chapter, which corresponds to the STDEV function in Excel.) c. Now calculate the coefficients of variation Apex Footwear, Brac Bank, and the Market Index. d. Construct a scatter diagram graph that shows Apex Footwear's and Brac Bank's returns on the vertical axis and the market index's returns on the horizontal axis. e. Estimate Apex Footwear's and Brac Bank's betas by running regressions of their returns against the Market Index's returns. Are these betas consistent with your graph? f. The risk-free rate on long-term Treasury bonds is 6.04%. Assume that the market risk premium is 7%. What is the expected return on the market? Now use the SML equation to calculate the two companies required returns. g. If you formed a portfolio that consisted of 42% Apex Footwear and 58% Brac Bank, what would be its beta and its required return? h. Suppose an investor wants to include Apex Footwear's stock in his or her portfolio. Stocks A, B, and C are currently in the portfolio, and their betas are 0.769, 0.985, and 1.423, respectively. Calculate the new portfolio's required return if it consists of 25 percent of Apex Footwear, 15 percent of Stock A, 40 percent of Stock B, and 20 percent of Stock C. Apex Footwear and Brac Bank Ltd.'s stock prices and dividends, along with the Dhaka Stock Exchange (DSE) Index, are shown here for the period 2015-2020. The DSE Index data are adjusted to include dividends. Data as given in the problem are shown below: Brac Bank Ltd. Year 2020 2019 2018 2017 2016 2015 Apex Footwear Ltd. Stock Price Dividend Tk. 31.250 Tk. 1.600 33.550 2.500 31.400 1.540 32.350 1.750 31.375 2.766 34.625 1.600 Stock Price Tk. 55.750 54.300 51.750 54.000 52.500 53.750 Dividend Tk. 2.500 2.500 4.550 3.650 2.300 1.600 Market Index Includes Divs. 9,650.98 7,584.70 8,192.98 6,244.03 4,524.28 5,447.00 3. Use the data given to calculate annual returns for Apex Footwear, Brac Bank, and the Market Index, and then calculate average returns over the five-year period. (Hint: Remember, returns are calculated by subtracting the beginning price from the ending price to get the capital gain or loss, adding the dividend to the capital gain or loss, and dividing the result by the beginning price. Assume that dividends are already included in the index. Also, you cannot calculate the rate of return for 2015 because you do not have 2014 data.) b. Calculate the standard deviation of the returns for Apex Footwear, Brac Bank, and the Market Index. (Hint: Use the sample standard deviation formula given in the chapter, which corresponds to the STDEV function in Excel.) c. Now calculate the coefficients of variation Apex Footwear, Brac Bank, and the Market Index. d. Construct a scatter diagram graph that shows Apex Footwear's and Brac Bank's returns on the vertical axis and the market index's returns on the horizontal axis. e. Estimate Apex Footwear's and Brac Bank's betas by running regressions of their returns against the Market Index's returns. Are these betas consistent with your graph? f. The risk-free rate on long-term Treasury bonds is 6.04%. Assume that the market risk premium is 7%. What is the expected return on the market? Now use the SML equation to calculate the two companies required returns. g. If you formed a portfolio that consisted of 42% Apex Footwear and 58% Brac Bank, what would be its beta and its required return? h. Suppose an investor wants to include Apex Footwear's stock in his or her portfolio. Stocks A, B, and C are currently in the portfolio, and their betas are 0.769, 0.985, and 1.423, respectively. Calculate the new portfolio's required return if it consists of 25 percent of Apex Footwear, 15 percent of Stock A, 40 percent of Stock B, and 20 percent of Stock C
