Please conplete Question 5. I have attached the other two questions that quedtion 5 is reffering to. please show work for question 5.
Number 19 A B E F G H K D Question 5 (5 Marks) Refer to Questions 1 and 2. Richard has just received an unexpected bonus at work worth $5,500 and, given the J. Corp.'s reputation for excellent investment decision making, he will invest all of the bonus in J Corp. stock. Given the rates of return for stocks A, B, C, and D presented in Question 1 and the rates of return for J Corp. stock and the market presented in Question 2, as well as the cash amounts he is investing in stocks A, B, C, and D as you determined in Question 1, a) What is the beta of Richard's portfolio? (3 Marks) Enter Answer (round to two decimal points) b) Richard's portfolio is... (2 Mark) Aggressive Defensive Check only one Neither 1 Enter your Final Answer Here Complete your rough work in the space below rot parter -1 - 11 Merge Center $ %98-98 Clipboard Formatting Font Alignment Number 5 M68 X fy B G D E F G H A 1 Question 1 (4 Marks) 2 Richard must decide how to allocate the capital in his portfolio 3 Richard has $22,000 available to invest. He finds the rates of 4 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. 6 7 a) How much will he invest in each stock? $5,500 3 (1 Mark) 1 9 b) The expected return of Richard's porfolio is: 6.73 % 10 (2 Marks (Round your answer to one one-hundreth of a percent) 11 c) The standard deviation of Richard's portfolio return is: 6.73 % 12 (1 Mark)(Round your answer to one one hundredth of a percent) 13 1 14 Year Stock A(%) Stock B (%) Stock C (%) Stock D (%) Enter your Final Answer Here 15 3.680 -0.030 1.730 -5.800 16 2 17.780 4 535 -3.635 26.390 17 3 24 960 6.330 -5.430 37.160 18 26.960 6,830 -5.930 40.160 19 5 -29 280 -7 230 8.130 -44200 20 6 31.980 B 085 -7.185 47.690 21 7 25.680 6510 -5.610 38 240 8 26.440 6.700 -5 800 39.380 23 9 10.320 2.670 -1.770 15 200 24 10 19.780 6.035 -4 135 29.390 25 11 -11 280 -2.730 3.630 -17 200 12 -13.280 -3.230 4.130 -20.200 27 Complete your rough work in the space bekw Format Painter B - IM Merge & Center $ % ) Conditions Clipboard Font Alignment Number sh 29 fx B D E G M A Question 2 (3 Marks) Anna is a Vice President at the J Corporation. The company is considering e 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 1.6% and the market risk-premium is 3.5% 0.82 4.45% 1 Enter your Final Answer Here -2.00 a) What is the beta of J Corp.'s stock? 20 (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 1 the coming year? 12 2 Marks Round your answer to one one hundreth of a percent) J Corp Market Return Return 13 Year (%) (%) 14 1 -4.17 15 1729 8.73 16 3 24.47 12 32 17 4 26.47 13.32 -29 77 -14.80 6 31.49 15.83 7 25. 19 1268 8 25.95 13.00 9 9.83 5.00 19 20 9.73 24 11 -5.30 25 12 -1377 6.30 26 Complete your rough work in the space below 27 = = = = = = | Number 19 A B E F G H K D Question 5 (5 Marks) Refer to Questions 1 and 2. Richard has just received an unexpected bonus at work worth $5,500 and, given the J. Corp.'s reputation for excellent investment decision making, he will invest all of the bonus in J Corp. stock. Given the rates of return for stocks A, B, C, and D presented in Question 1 and the rates of return for J Corp. stock and the market presented in Question 2, as well as the cash amounts he is investing in stocks A, B, C, and D as you determined in Question 1, a) What is the beta of Richard's portfolio? (3 Marks) Enter Answer (round to two decimal points) b) Richard's portfolio is... (2 Mark) Aggressive Defensive Check only one Neither 1 Enter your Final Answer Here Complete your rough work in the space below rot parter -1 - 11 Merge Center $ %98-98 Clipboard Formatting Font Alignment Number 5 M68 X fy B G D E F G H A 1 Question 1 (4 Marks) 2 Richard must decide how to allocate the capital in his portfolio 3 Richard has $22,000 available to invest. He finds the rates of 4 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. 6 7 a) How much will he invest in each stock? $5,500 3 (1 Mark) 1 9 b) The expected return of Richard's porfolio is: 6.73 % 10 (2 Marks (Round your answer to one one-hundreth of a percent) 11 c) The standard deviation of Richard's portfolio return is: 6.73 % 12 (1 Mark)(Round your answer to one one hundredth of a percent) 13 1 14 Year Stock A(%) Stock B (%) Stock C (%) Stock D (%) Enter your Final Answer Here 15 3.680 -0.030 1.730 -5.800 16 2 17.780 4 535 -3.635 26.390 17 3 24 960 6.330 -5.430 37.160 18 26.960 6,830 -5.930 40.160 19 5 -29 280 -7 230 8.130 -44200 20 6 31.980 B 085 -7.185 47.690 21 7 25.680 6510 -5.610 38 240 8 26.440 6.700 -5 800 39.380 23 9 10.320 2.670 -1.770 15 200 24 10 19.780 6.035 -4 135 29.390 25 11 -11 280 -2.730 3.630 -17 200 12 -13.280 -3.230 4.130 -20.200 27 Complete your rough work in the space bekw Format Painter B - IM Merge & Center $ % ) Conditions Clipboard Font Alignment Number sh 29 fx B D E G M A Question 2 (3 Marks) Anna is a Vice President at the J Corporation. The company is considering e 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 1.6% and the market risk-premium is 3.5% 0.82 4.45% 1 Enter your Final Answer Here -2.00 a) What is the beta of J Corp.'s stock? 20 (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 1 the coming year? 12 2 Marks Round your answer to one one hundreth of a percent) J Corp Market Return Return 13 Year (%) (%) 14 1 -4.17 15 1729 8.73 16 3 24.47 12 32 17 4 26.47 13.32 -29 77 -14.80 6 31.49 15.83 7 25. 19 1268 8 25.95 13.00 9 9.83 5.00 19 20 9.73 24 11 -5.30 25 12 -1377 6.30 26 Complete your rough work in the space below 27 = = = = = = |
