Question: 1 )Consider two stocks, Stock D, with an expected return of 13 percent and a standard deviation of 31 percent, and Stock I, an international

1 )Consider two stocks, Stock D, with an expected return of 13 percent and a standard deviation of 31 percent, and Stock I, an international company, with an expected return of 16 percent and a standard deviation of 37 percent. The correlation between the two stocks is 0.1. What is the weight of stock D in the minimum variance portfolio? (Do not round intermediate calculations. Round your answers to 4 decimal places.)

2)The risk-free rate is 4.15 percent. What is the expected risk premium on this stock given the following information? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) State of the Economy Probability of State of Economy Rate of Return if State Occurs Boom 0.35 19% Normal 0.65 7%

3) Use the following information on states of the economy and stock returns to calculate the expected return for Dingaling Telephone: (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) State of Economy Probability of State of Economy Security Return if State Occurs Recession 0.30 -6.5 % Normal 0.55 9.0 Boom 0.15 19.0

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Consider two stocks, Stock D, with an expected return of 13 percent and a standard deviation of 25 percent, and Stock I, an international company, with an expected return of 6 percent and a standard...

Consider two stocks, Stock D, with an expected return of 13 percent and a standard deviation of 25 percent, and Stock I, an International company, with an expected return of 6 percent and a standard...

Consider two stocks, Stock D, with an expected return of 13 percent and a standard deviation of 33 percent, and Stock I, an international company, with an expected return of 16 percent and a standard...

Consider two stocks, Stock D, with an expected return of 16 percent and a standard deviation of 31 percent, and Stock I, an international company, with an expected return of 9 percent and a standard...

Consider two stocks, Stock D, with an expected return of 21 percent and a standard deviation of 36 percent, and Stock I, an international company, with an expected return of 9 percent and a standard...

Consider two stocks, Stock D, with an expected return of 16 percent and a standard deviation of 32 percent, and Stock I, an international company, with an expected return of 7 percent and a standard...

Consider two stocks, Stock D, with an expected return of 13 percent and a standard deviation of 31 percent, and Stock I, an international company, with an expected return of 16 percent and a standard...

5 Consider two stocks, Stock D, with an expected return of 17 percent and a standard deviation of 33 percent, and Stock I, an international company, with an expected return of 8 percent and a...

6 Consider two stocks, Stock D, with an expected return of 13 percent and a standard deviation of 25 percent, and Stock I, an international company, with an expected return of 6 percent and standard...

Consider two stocks, Stock D, with an expected return of 13 percent and a standard deviation of 26 percent, and Stock I, an international company, with an expected return of 16 percent and a standard...

The following pseudo-syntheses (guaranteed not to work) exemplify a common conceptual error. (a) What is the conceptual error implicit in these syntheses? (b) Propose syntheses that are more likely...

On January 1, Reschke Company signed a 1-year rental for a total of $90,000, with quarterly payments of $22,500 due at the end of each quarter. In addition, the renter must pay contingent rent of 3%...

Please see the attached image. Plese prepare the sales budget by quarters for the year ending Dec 31 2022. Please use the same format as the image above for preparing the budget. Swifty Company...

A. You have been assigned as the Project Manager on a project to create a new website for your organisation. How will your role be affected depending on if the organisation has a Functional Structure...