please answer question 5. I also included question 1 and 2 because the questions refers to them.

B D E K L 2 E H 1 1 Question 5 (5 Marks) Refer to Questions 1 and 2. Richard has just received an unexpected 3 bonus at work worth $20,000 and, given the J. Corp.'s reputation 4 for excellent investment decision making, he will invest all of the bonus 5 in J Corp. stock. Given the rates of return for stocks A, B, C, and D 6 presented in Question 1 and the rates of return for J Corp. stock and 7 the market presented in Question 2, as well as the cash amounts he 8 is investing in stocks A, B, C, and D as you determined in Question 1, 10 a) What is the beta of Richard's portfolio? (3 Marks) Enter Answer (round to two decimal points) 13 b) Richard's portfolio is... (2 Mark) Aggressive Defensive Neither 16 17 Enter your Final Answer Here 18 Complete your rough work in the space below 9 11 12 14 } Check only one box 15 D 1 Question 1 (4 Marks) 2. Richard must decide how to allocate the capital in his portfolio. 3 Richard has $80,000 available to invest. He finds the rates of return for four stocks for the past 12 years and the results are given 5 below. Richard plans to invest 25% of his funds in each stock. Enter Answer 7 a) How much will he invest in each stock? (1 Mark) 8 9 b) The expected return of Richard's porfolio is: Enter Answer % 10 (2 Marks/Round your answer to one one-hundreth of a percent) 11 c) The standard deviation of Richard's portfolio return is: Enter Answer % 12 (1 MarkXRound your answer to one one hundredth of a percent) 13 T Year Stock A (%) Stock B (%) Stock C(%) Stock D (%) Enter your Final Answer Here 15 1 -9.090 -15.300 1.580 -14.820 16 2 12.294 20.340 -1.984 20.820 17 3 14.994 24.840 -2.434 25.320 18 4 7.794 12.840 -1.234 13.320 19 5 -18.090 -30.300 3.080 29.820 20 6 19.110 31.700 -3.120 32.180 21 7 11 310 18.700 -1.820 19.180 22 8 15.942 26.420 2.592 26.900 23 9 13.230 21.900 2.140 22.380 10 13.494 22.340 -2.184 22.820 25 11 -5.706 -9.680 1.016 -9.180 26 12 -8.490 -14.300 1.480 13.820 27 28 Complete your rough work in the space below NONNSONS 24 Question 2 (3 Marks) Anna is a Vice President at the J Corporation. The company is considering a 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 1.4% and the market risk-premium is 3.0%. Enter Answer Enter Answer Enter your Final Answer Here a) What is the beta of J Corp.'s stock? (1 Mark)(Round 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? (2 Marks Round your answer to one one-hundreth of a percent) J Corp. Market Return Return Year (%) (%) 1 -5.94 -7.80 2 8.32 10.02 3 10.12 12.27 4 5.32 6.27 5 -11.94 -15.30 6 12.86 15.70 7 7.66 9.20 8 10.75 13.06 9 8.94 10.80 10 9.12 11.02 11 -3.68 -4.98 12 -5.54 -7.30 Complete your rough work in the space below + B D E K L 2 E H 1 1 Question 5 (5 Marks) Refer to Questions 1 and 2. Richard has just received an unexpected 3 bonus at work worth $20,000 and, given the J. Corp.'s reputation 4 for excellent investment decision making, he will invest all of the bonus 5 in J Corp. stock. Given the rates of return for stocks A, B, C, and D 6 presented in Question 1 and the rates of return for J Corp. stock and 7 the market presented in Question 2, as well as the cash amounts he 8 is investing in stocks A, B, C, and D as you determined in Question 1, 10 a) What is the beta of Richard's portfolio? (3 Marks) Enter Answer (round to two decimal points) 13 b) Richard's portfolio is... (2 Mark) Aggressive Defensive Neither 16 17 Enter your Final Answer Here 18 Complete your rough work in the space below 9 11 12 14 } Check only one box 15 D 1 Question 1 (4 Marks) 2. Richard must decide how to allocate the capital in his portfolio. 3 Richard has $80,000 available to invest. He finds the rates of return for four stocks for the past 12 years and the results are given 5 below. Richard plans to invest 25% of his funds in each stock. Enter Answer 7 a) How much will he invest in each stock? (1 Mark) 8 9 b) The expected return of Richard's porfolio is: Enter Answer % 10 (2 Marks/Round your answer to one one-hundreth of a percent) 11 c) The standard deviation of Richard's portfolio return is: Enter Answer % 12 (1 MarkXRound your answer to one one hundredth of a percent) 13 T Year Stock A (%) Stock B (%) Stock C(%) Stock D (%) Enter your Final Answer Here 15 1 -9.090 -15.300 1.580 -14.820 16 2 12.294 20.340 -1.984 20.820 17 3 14.994 24.840 -2.434 25.320 18 4 7.794 12.840 -1.234 13.320 19 5 -18.090 -30.300 3.080 29.820 20 6 19.110 31.700 -3.120 32.180 21 7 11 310 18.700 -1.820 19.180 22 8 15.942 26.420 2.592 26.900 23 9 13.230 21.900 2.140 22.380 10 13.494 22.340 -2.184 22.820 25 11 -5.706 -9.680 1.016 -9.180 26 12 -8.490 -14.300 1.480 13.820 27 28 Complete your rough work in the space below NONNSONS 24 Question 2 (3 Marks) Anna is a Vice President at the J Corporation. The company is considering a 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 1.4% and the market risk-premium is 3.0%. Enter Answer Enter Answer Enter your Final Answer Here a) What is the beta of J Corp.'s stock? (1 Mark)(Round 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? (2 Marks Round your answer to one one-hundreth of a percent) J Corp. Market Return Return Year (%) (%) 1 -5.94 -7.80 2 8.32 10.02 3 10.12 12.27 4 5.32 6.27 5 -11.94 -15.30 6 12.86 15.70 7 7.66 9.20 8 10.75 13.06 9 8.94 10.80 10 9.12 11.02 11 -3.68 -4.98 12 -5.54 -7.30 Complete your rough work in the space below +