Please provide answers to the attached study guide with step by step process of solving the various problems.

Chapter 5 1. Calculation of geometric mean (GM) i Example: holding period return 10%, -3% 0 1 2 |------------|------------| HPR: 10% -3% 2. Calculation of dollar-weighted mean (DM) ii Example CF 0 -100 1 70 2 40 3. Advantages and disadvantages in AM, GM and DM Refer to the course reader 4. What makes AM and GM different? iii 5. What makes GM and DM different? iv 6. Meanings of skew(ness) and kurtosis v 7. The values of skew(ness) and kurtosis of the Normal distributionvi 8. Implications of negative skew for investment vii 9. Implications of positive excess kurtosis for investment viii 10. Skew and kurtosis of actual stock return distributions ix 11. Advantages and disadvantages in using the Normal distribution in investment analysis x 12. Calculation of Value at Risk (VaR) using the normal distribution and using the actual past return data Refer to the course reader 13. An issue in using past data to calculate VaR xi 14. Consider a portfolio (\"portfolio 1\") with the following probability distribution. Assume the risk free rate is 3%. xii (1) Find out risk premium and Sharpe ratio. (2) If you allocate 30% of your investment on risk-free asset and 70% on the portfolio 1, what is the expected return and standard deviation of the combination (\"portfolio 2\"). Event (Scenario) Outcome Probability Good 12% 0.6 Bad -5% 0.4 1 Chapter 6 1. The two main reasons why the firm-specific risk is removed as a portfolio is diversified xiii 2. Given the known values of expected returns and standard deviations for risky assets, what are the two determinants of the risk (standard deviation) of a portfolio (composed of the risky assets)? xiv 3. Meaning of a minimum variance portfolio xv 4. Meaning of an investment opportunity set xvi 5. Is a negative weight on an asset possible? What is the meaning of negative weight? xvii 6. Meaning of efficient frontier (portfolios) of risky assets xviii 7. Meaning of capital allocation line (CAL) xix 8. Meaning of Sharpe ratioxx 9. Relation between Sharpe ratio and CAL xxi 10. Meaning of an optimal risky portfolio xxii 11. Meaning of market portfolio xxiii 12. Meanings and comparison of CML and SML (SML is from chapter 7) xxiv 13. At which portfolio the risk is minimized? xxv a. Minimum variance portfolio b. Optimal risky portfolio 14. At which portfolio the Sharpe ratio is maximized? xxvi a. Minimum variance portfolio b. Optimal risky portfolio 15. Meanings and relation of the beta coefficient and security characteristic line (SCL) xxvii 16. Given the index model, = + + ( ) + , what would be the meaning of alpha? xxviii 2 17. Which stock is riskier to an undiversified investor who puts all of his funds in only one of these stocks? xxix 18. Consider the following information in the table. Suppose that you are going to invest $800 on Stock A and $200 on Stock B now. What is the mean return and standard deviation of a portfolio composed of stocks A and B? xxx Return on A (%) Return on B (%) Mean 6.0 13.2 Standard deviation 7.5 12.0 Correlation coefficient -0.1 19. Numerical calculations of xxxi (1) Beta (2) Alpha (3) Total risk of excess return (in variance term) Note: when calculating variance, use \"N\