Question: Help, step by step handwriting calculation, not use Excel. Thank you Call style POFT K9 B D E F G H x fxl A 1

Help, step by step handwriting calculation, not use Excel. Thank you  Help, step by step handwriting calculation, not use Excel. Thank you
Call style POFT K9 B D E F G H x fxl

Call style POFT K9 B D E F G H x fxl A 1 Question 1 2 3 You are given the following information about returns on individual stocks and a market portfolio 4 State of Economy Probability (P) Stock A (in %) Stock B (in %) Market Index (in %) 5 Recession -20 6 -8 6 Growth 0.5 11 1 8 7 Boom 0.3 23 -1 14 8 9 The T-bill rate is 3% 10 Answer the following questions: 11 a. Compute the expected return on Stock A, Stock B, and the Market Index. (3+3+3 marks] 12 b. Compute the standard deviation of returns on Market Index. (5 marks) 13 c. If you create a portfolio with 60% welght on stock A and 40% weight on stock B, what is your portfolio return? [3 marks] 14 d. What is the standard deviation of the portfolio you have created in part (c) above? (6 marks) 15 e. Compute the beta of Stock A and Stock B. [5+5 marks) 16 f. What is the beta of your portfolio you created in part (b) above? (4 marks] 17 . If the T-bill rate is 2% and market return is same as you found in part (a), identify whether the stocks are correctly priced or overpriced or underpriced. [3+1+3+1 marks] 18 [Hints: You can draw a SML and check whether the average return on these stocks are same as estimated by the SML or somewhat differently 19 20 21 22 23 24 25 Instructions 01 Q2 + Anady Aa X MacBook Air 11 Cal Styles Forma F18 Ax fx c D E G H K M A 1 Question N 0 You are even the estimated cash flows of three independent projects as below 4 Time Proje Project 5 -100 -100 -300 5 1 40 SA 55 7 2 41 55 4 3 42 9 10 Required to return 15% 11 Answer the following 12 . Find the NPV of Project X & Y Among the projects which add more value to the company why? 15+57 ms 13 Find the IRR of Project X AZ. You must show computation process, and proximatewer would be fine. If you report just wing EXCEL or financial calculator, you won't get any art 14 ct there is a captioning of $200, which projector projects would you choow and why? 16 marts 15 d. you are that the cash inflows trom then be rented at 15find the modified of Prod.15 marta 16 Now You can uw or financial calculator to verify your swers but you must provide des con processes while niwering this question 11 19 20 21 22 25 26 Instruction 08 02 + Read ARA MacBook Air DOA A 1 # 3 $ 4 % 5 & 7 6 8 9

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