Question: can somebody please help. part d) what is the BETA for each stock for stock a, stock b, stock c and stock d. will give

can somebody please help. part d) what is the BETA for each stock for stock a, stock b, stock c and stock d. will give a thumbs up!! can somebody please help. part d) what is the BETA for each
just need question 5 anwsered.. is why i needed the beta for stock a, stock b, stock c and stock d. stock for stock a, stock b, stock c and stock d. will
give a thumbs up!! just need question 5 anwsered.. is why i

A B 1 Question 1 (4 Marks) 2 Richard must decide how to allocate the capital in his portfolio. 3 Richard has $2,000 available to invest. He finds the rates of 4 return for four stocks for the past 12 years and the results are given 5 below. Richard plans to invest 25% of his funds in each stock. 6 9 7 $500 a) How much will he invest in each stock? 8 (1 Mark) 3.96 % b) The expected return of Richard's porfolio is: 10 (2 Marks)(Round your answer to one one-hundreth of a percent) 11 13.50 % c) The standard deviation of Richard's portfolio return is: 12 (1 Mark)(Round your answer to one one hundredth of a percent) 13 14 Year Stock A (%) Stock B (%) Stock C (%) Stock D (%) Enter your Final Answer Here 15 0.000 0.000 0.000 0.000 16 14.000 3.500 -3.500 21.000 17 24.000 6.000 -6.000 36.000 18 4 12.000 3.000 -3.000 18.000 19 5 -36.000 -9.000 9.000 -54.000 20 6 44.000 11.000 11.000 66.000 21 0.000 0.000 0.000 0.000 22 8 26.000 6.500 -6.500 39.000 23 9 6.000 1.500 -1.500 9.000 24 10 16.000 4.000 --4.000 24.000 25 11 - 10.000 -2 500 2.500 - 15.000 26 12 -20 000 -5.000 5.000 -30.000 27 Complete your rough work in the space belo Title Page Question 1 Question 2 Question 3 Question 4 Question 5 WN - 1 Question 5 (5 Marks) 2 Refer to Questions 1 and 2. Richard has just received an unexpected 3 bonus at work worth $500 and, given the J. Corp.'s reputation 4 for excellent investment decision making, he will invest all of the bonus 5 in J Corp. stock. Given the rates of return for stocks A, B, C, and D 6 presented in Question 1 and the rates of return for J Corp. stock and 7 the market presented in Question 2, as well as the cash amounts he 8 is investing in stocks A, B, C, and D as you determined in Question 1, 10 a) What is the beta of Richard's portfolio? (3 Marks) Enter Answer 11 (round to two decimal points) 13 b) Richard's portfolio is... (2 Mark) Aggressive 14 Defensive Check only one box 15 Neither 16 17 Enter your Final Answer Here 18 Complete your rough work in the space below 19 9 12 } Question 2 (3 Marks) Anna is a Vice President at the J Corporation. The company is considering investing in a new factory and Anna must decide whether it is a feasible - project. In order to assess the viability of the project, Anna must first calculate the rate of return that equity holders expect from the company stock. The annual returns for J Corp. and for a market index are given below. Currently, 7 the risk-free rate of return is 1.0% and the market risk-premium is 2.2% 8 2.00 5.40% 11 Enter your Final Answe 9 a) What is the beta of J Corp.'s stock? 10 (1 Mark Round your answer to two decimal places) b) Using the CAPM model, what is the expected rate of return on J Corp. stock for the coming year? 12 (2 Marks)Round your answer to one one hundreth of a percent) J Corp. Market 13 Year Return (%) Retum (%) 14 1 0.00 0.00 15 2 14.00 7.00 16 3 24.00 12.00 17 4 12.00 6.00 18 5 -36.00 - 18.00 6 44.00 22.00 20 7 0.00 0.00 21 26.00 13.00 22 9 6.00 3.00 23 10 16.00 8 24 11 -10.00 -5.00 25 12 -20.00 -10.00 26 Complete your rough work in the space below 19 8

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!