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please answer all. thank you Below Points as marked (10 Points Total) Q1) There is a 33.80% probability of a below average economy and a
please answer all. thank you
Below Points as marked (10 Points Total) Q1) There is a 33.80% probability of a below average economy and a 66.20% probability of an average economy. If there is a below average economy stocks A and B will have retums of -2.10% and 7.30%, respectively. If there is an average economy stocks A and B will have retums of 14.70% and -9.00%, respectively. Compute the: a) Expected Retum for Stock A (0.75 points): b) Expected Retum 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 34.60% probability of an average economy and a 65.40% probability of an above average economy. You invest 41.10% of your money in Stock S and 58.90% of your money in Stock T. In an average economy the expected retums for Stock S and Stock T are 5.40% and 13.60%, respectively. In an above average economy the the expected retums for Stock S and T are 18.30% and 38.40%, respectively. What is the expected retum for this two stock portfolio? (2 points) Q3) You are invested 12.20% in growth stocks with a beta of 1.85, 29.50% in value stocks with a beta of 1.28, and 58.30% 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 = 1.22; expected retum on the Market = 12.90%; expected retum on T-bills = 1.00%; current stock Price = $9.51; expected stock price in one year = $14.61; expected dividend payment next year= $2.24. Calculate the a) Required retum for this stock (1 point): b) Expected retum for this stock (1 point): 5 8 Q5) The market risk premium for next period is 7.00% and the risk-free rate is 3.00%. Stock Z has a beta of 1.33 and an expected retum of 11.00%. What is the a) Market's reward-to-risk ratio? (1 point): b) Stock Z's reward-to-risk ratio (1 point): 19 20 27 Step by Step Solution
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