finance Formula k p =W1k 1+ W2k^2+...+ Wnk^n where: kp W k^ n = expected return of
Fantastic news! We've Found the answer you've been seeking!
Question:
finance
Transcribed Image Text:
Formula k p =W1k 1+ W2k^2+...+ Wnk^n where: kp W k^ n = expected return of portfolio the weight invested for each stock = expected return on ith stock = number of stocks in the portfolio ap = wa2s2a +w2bs + 2WaWbabSaSb where: ap Wa and Wb Sa Sb rab CV = a/k = standard deviation of the portfolio = the weight invested for each stock = the standard deviation of stock A the standard deviation of stock B = correlation between stock A and stock B =coefficient variation where: CV a =standard deviation k^ =expected return E(R) Rf+(RM-Rf) expected return on a security where: E(R) Rf = risk-free rate RM = beta of the security =expected market return (RM-R) equity market premium-market risk premium=RPM p = W11+W22 where: ..+Wnn = beta of a portfolio W = weights of ringgit invested for each stock n = number of stocks in the portfolio Formula k p =W1k 1+ W2k^2+...+ Wnk^n where: kp W k^ n = expected return of portfolio the weight invested for each stock = expected return on ith stock = number of stocks in the portfolio ap = wa2s2a +w2bs + 2WaWbabSaSb where: ap Wa and Wb Sa Sb rab CV = a/k = standard deviation of the portfolio = the weight invested for each stock = the standard deviation of stock A the standard deviation of stock B = correlation between stock A and stock B =coefficient variation where: CV a =standard deviation k^ =expected return E(R) Rf+(RM-Rf) expected return on a security where: E(R) Rf = risk-free rate RM = beta of the security =expected market return (RM-R) equity market premium-market risk premium=RPM p = W11+W22 where: ..+Wnn = beta of a portfolio W = weights of ringgit invested for each stock n = number of stocks in the portfolio
Expert Answer:
Related Book For
Introduction To Corporate Finance
ISBN: 9781118300763
3rd Edition
Authors: Laurence Booth, Sean Cleary
Posted Date:
Students also viewed these finance questions
-
Consider two hypothetical stocks, X and Y. The expected return on stock X is equal to 9% and the expected return on stock Y is equal to 15%. Standard deviation of stock X and Y are 19% and 27%,...
-
Reporting Earnings per Share Disclosures Siera Inc. had 350,000 shares of common stock outstanding throughout the year that declared and paid dividends of $50,000 during the year. The company also...
-
a. Determine IC and VCE for the network of Fig. 4.115. In Figure 4.115 b. Change β to 120 (50% increase), and determine the new values of lC and VCE for the network of Fig. 4.115. c....
-
Will, a bachelor, died in 2016. At that time, his sole asset was cash of $6 million. Assume no debts or funeral and administration expenses and no charitable bequests. His gift history was as...
-
what is the final velocity if the mass is 0.150kg and the spring PE is 0.14625J and the initial kinetic energy is 0.14625J and spring compression is 0.05m and slope is -34.91?
-
After the positrons were annihilated, the energy density of the universe was dominated by the photons and the neutrinos. Show that the energy density in that era was given by \(u_{\text {total...
-
Towne Architects incorporated as licensed architects on April 1, 2012. During the first month of the operation of the business, these events and transactions occurred: Apr. 1 Stockholders invested...
-
Netflix estimates that North American demand for its streaming service has an elasticity of approximately -1.5. In 2022, 74 million subscribers generated revenues of just over $14 billion at an...
-
Shepard Industries had NI in the year just ended of $10 million. It spent $6 million on total capital expenditures and increases in net working capital and had $14 million in depreciation expenses....
-
Kane's business is producing a single product K. He collected the following information between production volume and maintenance costs, and now he is finding whether there is a linear relationship...
-
Reword the following Selling a property is one of the biggest financial transactions you'll make, at OBrien Real Estate we aim to take the stress out of the equation and deliver a result over and...
-
The budgeted variable MOH rate at is $5.20/machine hour, where every unit requires 3 machine hours. Additionally, the following fixed MOH costs are anticipated for the production: depreciation of...
-
A construction company sells a house with a FMV of $ 600 comma 000 to a shareholder of the corporation for $ 475 comma 000. The shareholder is liable for income tax on the $ 125 comma 000 difference....
-
If an individual shareholder of a corporation, who is in the business of lending money, receives a loan from the corporation with terms that are equivalent to that of clients, the principal amount...
-
1.CPU-on-Demand (CPUD) offers real-time high-performance computing services. CPUD owns 1 supercomputer that can be accessed through the Internet. Their customers send jobs that arrive on average...
-
Do public and private companies follow the same set of accounting rules? Explain.
-
Prince Rupert Fly n Fish Inc. purchases one small plane in its first year of business for $70,000. In year 2, it purchases another plane for $90,000. Find the UCC at the end of year 3 if the CCA rate...
-
There are two suppliers of one input for a factory. Supplier A offers a selling price of $500 with terms of 1/10 net 30, while Supplier B offers $520 with 2/10 net 60. Which supplier offers the lower...
-
Corines Candies Inc. registered a gross profit margin of 75 percent on sales of $16 million in 2012. What would the companys income statement show for the cost of goods sold? At the end of 2011,...
-
An analyst makes the following statement: Use of P/E and other multiples for analysis is not effective because the multiples are based on historical data and because not all companies have positive...
-
The primary difference between P/E multiples based on comparables and P/E multiples based on fundamentals is that fundamentals-based P/Es take into account: A. Future expectations. B. The law of one...
-
A price-to-earnings ratio that is derived from the Gordon growth model is inversely related to the: A. Growth rate. B. Dividend payout ratio. C. Required rate of return.
Study smarter with the SolutionInn App