Question: Can someone help me with problem 1,2, and 3? and explain why some of the numbers are in percentage and others not? 0.6(0.20) + 0.3(0.07)

 Can someone help me with problem 1,2, and 3? and explain

Can someone help me with problem 1,2, and 3? and explain why some of the numbers are in percentage and others not?

0.6(0.20) + 0.3(0.07) 3. Required return = R, + (R) - RB Stock A Required return = 1.4 + (9.3 - 1.4)0.65 = 6.535% Stock B Required return 1.4 + (9.3 - 1.4)1.9 = 16.41% The portfolio beta: (0.3) (0.65) + (0.7) (1.9) = 1.525 Dividend Yield Capital Gain 0% 1. You are considering three stocks with the following expected dividend yields and a) What is the expected return on a portfolio consisting of 40 percent in stock A and ROBLEMS capital gains: A 149 8 6 B 14 0 C a) What is the expected return on each stock? b) How may transactions costs and capital gains taxes affect your choices among the three securities? 2. A portfolio consists of assets with the following expected returns: Expected Return Weight in Portfolio Real estate 16% 20% Low-quality bonds 15 10 AT&T stock 12 30 Savings account 5 40 a) What is the expected return on the portfolio? b) What will be the expected return if the individual reduces the holdings of the AT&T stock to 15 percent and puts the funds into real estate investments? 3. You are given the following information concerning two stocks: A 10% 14% 3.0 5.0 -0.1 B Expected return Standard deviation of the expected return Correlation coefficient of the returns 60 percent in stock B? b) What is the standard deviation of this portfolio? 0.6(0.20) + 0.3(0.07) 3. Required return = R, + (R) - RB Stock A Required return = 1.4 + (9.3 - 1.4)0.65 = 6.535% Stock B Required return 1.4 + (9.3 - 1.4)1.9 = 16.41% The portfolio beta: (0.3) (0.65) + (0.7) (1.9) = 1.525 Dividend Yield Capital Gain 0% 1. You are considering three stocks with the following expected dividend yields and a) What is the expected return on a portfolio consisting of 40 percent in stock A and ROBLEMS capital gains: A 149 8 6 B 14 0 C a) What is the expected return on each stock? b) How may transactions costs and capital gains taxes affect your choices among the three securities? 2. A portfolio consists of assets with the following expected returns: Expected Return Weight in Portfolio Real estate 16% 20% Low-quality bonds 15 10 AT&T stock 12 30 Savings account 5 40 a) What is the expected return on the portfolio? b) What will be the expected return if the individual reduces the holdings of the AT&T stock to 15 percent and puts the funds into real estate investments? 3. You are given the following information concerning two stocks: A 10% 14% 3.0 5.0 -0.1 B Expected return Standard deviation of the expected return Correlation coefficient of the returns 60 percent in stock B? b) What is the standard deviation of this portfolio

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