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Please Answer the following Question AS SOON AS POSSIBLE!!!!!! 6021FIN Question 3 The following table shows the possible returns of three stocks and their associated
Please Answer the following Question AS SOON AS POSSIBLE!!!!!!
6021FIN Question 3 The following table shows the possible returns of three stocks and their associated probabilities: Probability 0.1 0.6 0.3 Stock X -1% 15% -8% Stock Y 17% 5% -7% Stock Z 4% 12% -3% 2.41 3.09 2.24 Current Share Price Expected Return Standard Deviation Beta 6.5% ? ? 7.2% 6.7% 6.8% 0.51 0.19 ? a) What is the standard deviation for Stock X?. [5 Marks] b) What is the expected return of Stock Y?. [5 Marks] c) What is the beta of Stock Z if it is fairly priced?. [5 Marks] d) An investor has 1000 to spend and wants to create a portfolio which has a beta of 0.70 using only Stocks X and Y. How many shares of each company would the investor need to purchase?. [10 Marks]Step by Step Solution
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