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please answer these 4 questions in the next hour. thank you! 1. Award: 5.00 points You have $22,000 to invest in a stock portfolio. Your
please answer these 4 questions in the next hour.
thank you!
1. Award: 5.00 points You have $22,000 to invest in a stock portfolio. Your choices are Stock X with an expected return of 11 percent and Stock Y with an expected return of 13.0 percent. If your goal is to create a portfolio with an expected return of 11.74 percent, how much money will you invest in Stock X and Stock Y? Stock X Amount invested $ $ Stock Y References WorksheetDifficulty: BasicLearning Objective: 13-01 How to calculate expected returns. 6. Award: 5.00 points Consider the following information: Rate of Return If State Occurs State of Economy Recession Normal Boom Probability of State of Economy 0.22 0.52 0.26 Stock A 0.07 0.10 0.15 Stock B 0.22 0.07 0.24 Calculate the expected return for the two stocks. (Round your answers to 2 decimal places. (e.g., 32.16)) Stock A Stock B Expected return % % Calculate the standard deviation for the two stocks. (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16)) Stock A Standard deviation % % Stock B References WorksheetDifficulty: BasicLearning Objective: 13-01 How to calculate expected returns. 10. Award: 5.00 points Stock Y has a beta of 1.8 and an expected return of 18.2 percent. Stock Z has a beta of 0.8 and an expected return of 9.6 percent. What would the risk-free rate have to be for the two stocks to be correctly priced? (Round your answer to 2 decimal places. (e.g., 32.16)) % Risk-free rate References WorksheetDifficulty: BasicLearning Objective: 13-04 The security market line and the risk-return trade-off. 12. Award: 5.00 points Suppose you observe the following situation: Rate of Return if State Occurs State of Economy Probability of State Stock A Stock B Bust Normal Boom 0.25 0.45 0.30 0.12 0.09 0.44 0.10 0.09 0.24 a. Calculate the expected return on each stock. (Round your answers to 2 decimal places. (e.g., 32.16)) Stock A Expected return % Stock B % b. Assuming the capital asset pricing model holds and stock A's beta is greater than stock B's beta by 0.75, what is the expected market risk premium? (Round your answer to 2 decimal places. (e.g., 32.16)) Expected market risk premium % References WorksheetDifficulty: ChallengeLearning Objective: 13-04 The security market line and the risk-return trade-offStep by Step Solution
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