Not sure how to solve this, I keep getting very weird numbers, help is appreciated!
Question 1 (4 Marks) Richard must decide how to allocate the capital in his portfolio. Richard has $50,000 available to invest. He finds the rates of return for four stocks for the past 12 years and the results are given below. Richard plans to invest 25% of his funds in each stock. a) How much will he invest in each stock? $12.500 (1 Mark) b) The expected return of Richard's porfolio is: Enter Answer % (2 Marks)(Round your answer to one one-hundreth of a percent) c) The standard deviation of Richard's portfolio return is: Enter Answer % (1 Mark)( Round your answer to one one-hundredth of a percent) Year Stock A (%) Stock B (%) Stock C (%) Stock D () Enter your Final Answer Here 4.360 -14.140 4.480 -1.920 10.080 29.180 -7.072 5.300 12.680 37.580 -9.312 9.700 12.680 37.580 -0.312 8.700 -13.160 -40.540 11.520 -6.320 Notnotoo! 16.180 47.480 -11.052 8.350 17 480 51.380 -12.092 2,000 13.500 39.440 -9.808 7.010 8.240 23.680 -5.600 4.380 10 11.080 32.180 -7.872 5.800 11 -5.080 -18.300 5.058 -2.280 12 -5. 160 -18.540 5.120 -2.320 Complete your rough work in the space below Anna is a Vice President at the J Corporation. The company is considering investing in a new factory and Anna must decide whether it is a feasible project. In order to assess the viability of the project, Anna must first calculate the rate of return that equity holders expect from the company stock. The annual returns for J Corp. and for a market index are given below. Currently. the risk-free rate of return is 1.8%% and the market risk-premium is 4.0%% a) What is the beta of J Corp.'s stock? Enter Answer (1 MarkKHound your answer to two decimal places b) Using the CAPM model, what is the expected rate of return on J Corp. stock for the coming year? Enter Answer (2 Marks XRound your answer to one one-hundreth of a percent) J Corp Markel Enter your Final Answer Here Relum () Retum (] -3.58 4.80 7.97 9.64 10.21 12.44 10.21 12:44 -10 62 -13.60 12.85 15.74 13.89 17.04 10.71 13.06 .50 7.80 10.64 1.18 -5.52 4.22 5.60 Campiolo your rough work In the space below