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The risk free rate of return is 2%. Given the following forecast possible returns for Limeston Limited and the S&P/TSX Composite Index a. Calculate the
The risk free rate of return is 2%. Given the following forecast possible returns for Limeston Limited and the S&P/TSX Composite Index a. Calculate the expected return for Limeston llustrate your solution using MS Equation) b. Calculate the expected return, variance and standard deviation for the S&P/TSX Composite Index (illustrate your c. Using an embedded Excel Spreadsheet, calculate the Covariance between Limeston's returns and the market index d. Calculate the Ex Ante Beta Coefficient for Limeston. Ilustrate the formula and your calculations using MS Equation. solution using an embedded Excel Spreadsheet) returns e. Is Limeston an aggressive or defensive investment? Explain. Possible Returns on Possible Returns S&P/TSX Probabilit 10% 20% 40% 20% 10% on Limeston Limited 47% 23% 15% 2% -33% Composite Index 24% 14% 9% 3% 12%
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