Course: Financial Management Principles

Topic: Risk and Return

Please can you answer the questions below.

1.Jackson has returns of 18%, -7%, -14%, and 10%, on his stock investment

What is the arithmetic average return on his stock?

What is the geometric average return on his stock?

2.Your portfolio consists of $3,000 in ABC stock, $4,500 of DEF stock and $2,500 of GHI stock.Expected rates of return are ABC 5%, DEF 12%, and GHI 16%.What is the portfolio expected rate of return?

3.The expected return on VZ next year is 12% with a standard deviation of 20%.The expected return on ANT next year is 24% with a standard deviation of 30%.The correlation between the two stocks is .6.If Emily makes equal investments in VZ and ANT, what is the standard deviation of her portfolio?