Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

use excel please You work for a small investment management firm. You have been provided with the following historical information for three stocks and the

image text in transcribed

use excel please

You work for a small investment management firm. You have been provided with the following historical information for three stocks and the market index. The information is shown in the table below. Using the data provided you are to calculate the following for each of the stocks and the market index. a) What is the average annual return for the past ten years? b) What is the geometric average annual return (effective annual rate of return) for the past ten years? c) What is the population standard deviation and the sample standard deviation? d) What is the correlation coefficient between Stocks AAA and BBB? Between Stocks AAA and CCC? Between Stocks BBB and CCC? e) What is the sample covariance between Stocks AAA and BBB, between Stocks AAA and CCC and between stocks BBB and CCC? f) What is the coefficient of variation for each of the stocks and the market index? You should use the sample standard deviation. g) What is the beta of each of the stocks? You can use Excel's "slope" function to estimate this. h) Assume that the beta of stock AAA is 0.60, the beta of stock BBB is 1.2 and the beta of stock CCC is 2.1. What is the beta of a portfolio where the weight in stock AAA is 20% the weight in stock BBB is 30% and the weight in stock CCC is 50% ? i) Assuming the risk-free rate is 3.75% and the expected return on the market is 8.95% what is the expected return on the portfolio in part (h) above

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Mortgage Ripoffs And Money Savers

Authors: Carolyn Warren

1st Edition

0470097833, 978-0470097830

More Books

Students also viewed these Finance questions

Question

Explain how a variable differs from a constant.

Answered: 1 week ago

Question

Explain the various methods of job evaluation

Answered: 1 week ago

Question

Differentiate Personnel Management and Human Resource Management

Answered: 1 week ago

Question

Describe the functions of Human resource management

Answered: 1 week ago