Question: Good evening, could you please help me solve this multipart finance problem? Thank you! Bartman Industries's and Reynolds Inc.'s stock prices and dividends, along with

Good evening, could you please help me solve this multipart finance problem? Thank you!

Bartman Industries's and Reynolds Inc.'s stock prices and dividends, along with the Winslow 5000 Index, are shown here for the period 20152020. The Winslow 5000 data are adjusted to include dividends.

Bartman Industries Reynolds Inc. Winslow 5000
Year Stock Price Dividend Stock Price Dividend Includes Dividends
2020 $16.40 $1.10 $47.00 $2.80 $11,971.51
2019 14.25 1.02 50.65 2.70 8,746.41
2018 15.85 0.95 47.00 2.60 8,622.63
2017 10.45 0.90 54.60 2.35 6,507.19
2016 10.97 0.85 57.25 2.20 5,702.96
2015 7.47 0.80 53.10 2.00 4,751.27

a. Use the data to calculate annual rates of return for Bartman, Reynolds, and the Winslow 5000 Index. Then calculate each entity's average return over the 5-year period. (Hint: Remember, returns are calculated by subtracting the beginning price from the ending price to get the capital gain or loss, adding the dividend to the capital gain or loss, and dividing the result by the beginning price. Assume that dividends are already included in the index. Also, you cannot calculate the rate of return for 2015 because you do not have 2014 data.) Round your answers to two decimal places.

Year Bartman Industries Reynolds Inc. Winslow 5000
2020 fill in the blank 2 % fill in the blank 3 % fill in the blank 4 %
2019 fill in the blank 5 % fill in the blank 6 % fill in the blank 7 %
2018 fill in the blank 8 % fill in the blank 9 % fill in the blank 10 %
2017 fill in the blank 11 % fill in the blank 12 % fill in the blank 13 %
2016 fill in the blank 14 % fill in the blank 15 % fill in the blank 16 %
Average fill in the blank 17 % fill in the blank 18 % fill in the blank 19 %

b. Calculate the standard deviations of the returns for Bartman, Reynolds, and the Winslow 5000. (Hint: Use the sample standard deviation formula, which corresponds to the STDEV.S function in Excel.) Round your answers to two decimal places.

Bartman Industries Reynolds Inc. Winslow 5000
Standard deviation fill in the blank 20 % fill in the blank 21 % fill in the blank 22 %

c. Calculate the coefficients of variation for Bartman, Reynolds, and the Winslow 5000. Round your answers to two decimal places.

Bartman Industries Reynolds Inc. Winslow 5000
Coefficient of variation fill in the blank 23 fill in the blank 24 fill in the blank 25

d. Assume the risk-free rate during this time was 4%. Calculate the Sharpe ratios for Bartman, Reynolds, and the Index over this period using their average returns. Round your answers to four decimal places.

Bartman Industries Reynolds Inc. Winslow 5000
Sharpe ratio fill in the blank 26 fill in the blank 27 fill in the blank 28

e. Construct a scatter diagram that shows Bartman's and Reynolds's returns on the vertical axis and the Winslow 5000 Index's returns on the horizontal axis. Choose the correct graph.

f. Estimate Bartman's and Reynolds's betas by running regressions of their returns against the index's returns. Round your answers to four decimal places.

Bartman's beta: _____

Reynolds's beta: ____

Are these betas consistent with your graph?

These betas are or are not consistent with the scatter diagrams.

g. Assume that the risk-free rate on long-term Treasury bonds is 5.5%. Assume also that the average annual return on the Winslow 5000 is not a good estimate of the market's required returnit is too high. So use 10% as the expected return on the market. Use the SML equation to calculate the two companies' required returns. Round your answers to two decimal places.

Bartman's required return: _____%

Reynolds's required return: _____ %

h. If you formed a portfolio that consisted of 50% Bartman and 50% Reynolds, what would the portfolio's beta and required return be? Round your answer for the portfolio's beta to four decimal places and for the portfolio's required return to two decimal places.

Portfolio's beta: ______

Portfolio's required return: _____%

i. Suppose an investor wants to include Bartman Industries's stock in his portfolio. Stocks A, B, and C are currently in the portfolio, and their betas are 0.713, 0.885, and 1.267, respectively. Calculate the new portfolio's required return if it consists of 30% of Bartman, 10% of Stock A, 45% of Stock B, and 15% of Stock C. Round your answer to two decimal places. ______ %

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