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Please dont copy answer form the question from chegg. (https://www.chegg.com/homework-help/questions-and-answers/financial-advisor-mathrm-abc-corporation-ceo-asked-analyze-following-information-pertainin-q100216610) I want it done better for easier understanding. I prefer excel too. As a financial
Please dont copy answer form the question from chegg. (https://www.chegg.com/homework-help/questions-and-answers/financial-advisor-mathrm-abc-corporation-ceo-asked-analyze-following-information-pertainin-q100216610)
I want it done better for easier understanding. I prefer excel too.
As a financial advisor at ABC Corporation, the CEO asked you to analyze the following information pertaining to two common stock investments, TI and SG. You are told that a oneyear Treasury Bill will have a rate of return of 5% over the next year. Also, information from an investment advising service lists the current beta for TI as 1.68 and for SG as 0.52. You are provided a series of questions to guide your analysis. 1. Using the probabilistic approach, calculate the expected rate of return for TI, SG and market. 2. Calculate the standard deviations in estimated rates of return for TI, SG and market. 3. Which is a better measure of risk for the common stock of TI and SG-the standard deviation you calculated in Question 2 or the beta? 4. Based on the beta provided, what is the expected rate of return for TI and SG for the next year? 5. If you form a two-stock portfolio by investing RM30,000 in TI and RM70,000 in SG, what is the portfolio beta and expected rate of return? 6. If you form a two-stock portfolio by investing RM70,000 in TI and RM30,000 in SG, what is the portfolio beta and expected rate of return? 7. Which of these two-stock portfolios do you prefer? Why
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