Question: Please answer all questions and show step by step using BA II Calculator Question 1 - Expected Return 12 points]: What is the expected return
Question 1 - Expected Return 12 points]: What is the expected return of the following investment? Probability Expected Return 0.3 30% 0.2 10% 0.5 -20% Question 2 - Coefficient of variation (2 points]: Roenfeld Corp believes the following probability distribution exists for its stock. What is the coefficient of variation on the company's stock? Probability Stock's State of of State Expected the Economy Occurring Return Boom 0.45 25% Normal 0.50 15% Recession 0.05 5% Question 3 - Beta Coefficient 2 points]: Or the $10,000 invested in a two-stock portfolio, 40 percent is invested in Stock A and 60 percent is invested in Stock B. If Stock A has a beta equal to 2.0 and the beta of the portfolio is 1.4, what is the beta of Stock B? Question 4 - Portfolio Return 12 points]: Marvin has investments with the following characteristics in his portfolio: Investment Expected Return Amount Invested ABC 30% $ 10,000 EFG 16% 50,000 ORP -20% 40,000 What is the expected return of Marvin's portfolio of investments, Question 5 - Portfolio Beta (2 points]: Mike Flannery holds the following portfolio: Stock Investment Beta A $150,000 1.40 B 50.000 0.80 100,000 1.00 D 75.000 1.20 $375.000 What is the portfolio's beta? Question 6 - Required Return (2 points]: Suppose that Ers-3% and ry - 10%. What is the appropriate required rate of return for Stock K that has a beta coefficient cqual to 2? Question 1 - Expected Return 12 points]: What is the expected return of the following investment? Probability Expected Return 0.3 30% 0.2 10% 0.5 -20% Question 2 - Coefficient of variation (2 points]: Roenfeld Corp believes the following probability distribution exists for its stock. What is the coefficient of variation on the company's stock? Probability Stock's State of of State Expected the Economy Occurring Return Boom 0.45 25% Normal 0.50 15% Recession 0.05 5% Question 3 - Beta Coefficient 2 points]: Or the $10,000 invested in a two-stock portfolio, 40 percent is invested in Stock A and 60 percent is invested in Stock B. If Stock A has a beta equal to 2.0 and the beta of the portfolio is 1.4, what is the beta of Stock B? Question 4 - Portfolio Return 12 points]: Marvin has investments with the following characteristics in his portfolio: Investment Expected Return Amount Invested ABC 30% $ 10,000 EFG 16% 50,000 ORP -20% 40,000 What is the expected return of Marvin's portfolio of investments, Question 5 - Portfolio Beta (2 points]: Mike Flannery holds the following portfolio: Stock Investment Beta A $150,000 1.40 B 50.000 0.80 100,000 1.00 D 75.000 1.20 $375.000 What is the portfolio's beta? Question 6 - Required Return (2 points]: Suppose that Ers-3% and ry - 10%. What is the appropriate required rate of return for Stock K that has a beta coefficient cqual to 2
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