Your boss gives you your first assignment. It involves analyzing two Canadian Telecom companies Telus and Rogers. Telus stock is currently trading at sixty-five dollars per share. Economic forecasts show that price of Telus shares will be fifty-three dollars if there is a recession, seventy-three dollars if the economy is normal and eighty-five dollars if the economy is booming. The probability of a recession, normal and booming economy is twenty, sixty and twenty percent respectively. Due to the COVID pandemic, dividends had been suspended for Telus and as a result the beta for this company is 0.68.<\/p>
On the other hand, Rogers Communication has continued paying its dividend and as such has an expected return of thirteen percent, a standard deviation of thirty-four percent and a beta of 0.45. The correlation between Telus and Rogers is 0.48.<\/p>
By beginning the test, you affirm that you will not give or receive any unauthorized help and that all work will be your<\/p>
own. You agree to abide by Yorkville's Academic Integrity Policy and you understand any violation of academic<\/p>
integrity will be subject to the penalties outlined in the policy.<\/p>
<\/p>
Finally, you are told that the market portfolio has a beta of 1 and a standard deviation of fourteen percent. The boss asks Billy for the following<\/p>
(a) Use the Capital Asset Pricing model to determine the expected return and standard deviation of Telus stock.<\/p>
(b) Building a portfolio of sixty percent investment in Telus and forty percent in Rogers communication what would the following be for this portfolio:<\/p>
Expected return<\/p>
Standard deviation<\/p>
Beta for the portfolio<\/p>
What would the Beta be for this portfolio if the investment was split into 80% Government T-Bills<\/p>
(no risk) and 10% for Telus and 10% for Rogers Communication stock.<\/p>
Show all your work<\/p>", "transcribed_text": "", "related_book": { "title": "Principles Of Finance", "isbn": "979-8439388899", "edition": "1st Edition", "authors": "Julie Dahlquist, Rainford Knight", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/6290aa2348f9a_11251.jpg", "uri": "\/textbooks\/principles-of-finance-1st-edition-9798439388899", "see_more_uri": "" }, "free_related_book": { "isbn": "0071751181", "uri": "\/textbooks\/5-steps-to-a-5-ap-statistics-2012-2013-4th-edition-9780071751186", "name": "5 Steps To A 5 AP Statistics 2012-2013", "edition": "4th\u00a0Edition" }, "question_posted": "2024-06-29 02:13:58", "see_more_questions_link": "\/study-help\/questions\/business-marketing-2022-June-08", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/if-led-emits-light-of-wavelength-955-650nm-what-is-the", "description": "If an LED emits light of wavelength = 650nm, what is the energy gap (in eV) between valence and conduction bands?", "stars": 3 }, { "url": "\/study-help\/theory-of-probability\/67-a-coin-having-probability-p-of-coming-up-heads-1982816", "description": "67. A coin having probability p of coming up heads is continually flipped. Let Pj(n) denote the probability that a run of j successive heads occurs within the first n flips. (a) Argue that Pj(n) =...", "stars": 3 }, { "url": "\/inventory-and-accounts-payable-journal-entries-tesco-plc-is-the", "description": "Inventory and accounts payable journal entries. Tesco Plc. is the U.K.'S largest grocery store chain. It applies IFRS and reports its results in millions of pounds sterling (). For the years ended...", "stars": 3 }, { "url": "\/study-help\/questions\/need-ah-journal-entries-with-numbers-the-two-charts-9860284", "description": "Need A-H journal entries (with numbers) & the two charts at the bottom filled out The Polaris Company uses #job-order costing system. The following transactions occur cober Raw materials purchased on...", "stars": 3 }, { "url": "\/study-help\/questions\/ish-later-submit-check-my-answers-bonus-you-walk-100-3281787", "description": "ish Later Submit Check My Answers BONUS: You walk 100 m due north. You turn and walk 55 m due east. You make another turn and walk 12 m due south. What is the resultant vector for your walk", "stars": 3 }, { "url": "\/study-help\/questions\/answer-with-solution-1the-statement-of-financial-position-of-a-3603668", "description": "ANSWER WITH SOLUTION: 1.The statement of financial position of A, B, C partnership as of December 31, 2020 is presented below:", "stars": 3 }, { "url": "\/study-help\/questions\/question-1-the-braveheart-corporation-uses-departmental-overhead-rates-to-3766023", "description": "Question 1 The Braveheart Corporation uses departmental overhead rates to allocate its manufacturing overhead to jobs. The company has two departments: cutting and painting. The Cutting Department...", "stars": 3 }, { "url": "\/study-help\/questions\/simulate-a-merge-conflict-e-introduce-a-merge-conflict-with-688830", "description": "Simulate a Merge Conflict E. Introduce a merge conflict with the \"Test\" branch by doing the following: add the git version number to the README.md file on the Working branch merge the \"Test\" branch...", "stars": 3 }, { "url": "\/study-help\/questions\/1-4-points-use-the-basic-differentiation-rulesformulas-to-find-1000907", "description": "1. [4 Points] Use the Basic Differentiation Rules\/Formulas to find the Derivative. Simplify your final answer algebraically and express it in radical notation. f(x) = [xx + 1 131] [x - 1\/1\/1]", "stars": 3 }, { "url": "\/study-help\/questions\/you-finally-saw-the-couch-you-need-the-colour-is-1000382", "description": "You finally saw the couch you need: the colour is perfect (royal blue), the length is just right (it could seat you, your husband, and the kids), and the style is ideal for your furnishings (modern...", "stars": 3 } ], "next_back_navigation": { "previous": "\/study-help\/questions\/15-ans-1251-1335-1830-knots-on-a-bearing-of-4446592", "next": "\/study-help\/questions\/assignment-instructions-cool-sun-produces-awnings-and-screens-cool-sun-4446594" }, "breadcrumbs": [ { "name": "Study help", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers" }, { "name": "Business", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers\/business" }, { "name": "Accounting", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/business-accounting" }, { "name": "Your boss gives you your first assignment. It involves analyzing two Canadian", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/your-boss-gives-you-your-first-assignment-it-involves-analyzing-4446593" } ], "skill_details": { "skill_id": "9", "skill_name": "Accounting", "parent_id": "1" } } } }