There is a 33.40% probability of a below average economy and a 66.60% probability of an...

  

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There is a 33.40% probability of a below average economy and a 66.60% probability of an average economy. If there is a below average economy stocks A and B will have returns of -7.20% and 14.00%. respectively. If there is an average economy stocks A and B will have returns of 19.30% and -5.80%, respectively. Compute the: a) Expected Return for Stock A (0.75 points): Q2) There is a 48.10% probability of an average economy and a 51.90% probability of an above average economy. You invest 31.80% of your money in Stock S and 68.20% of your money in Stock T. In an average economy the expected returns for Stock S and Stock Tare 10.50% and 6.90%, respectively. In an above average economy the the expected returns for Stock S and T are 36.80% and 31.30%, respectively. What is the expected return for this two stock portfolio? (2 points) Q3) You are invested 28.70% in growth stocks with a beta of 1.56. 22.40% in value stocks with a beta of 0.73, and 48.90% in the market portfolio. What is the beta of your portfolio? (1 point) Q4) An analyst gathered the following information for a stock and market parameters: stock beta = 1.41; expected return on the Market 9.20% expected retum on T-bills 2.60% current stock Price = $6.53 expected stock price in one year = $8.28, expected dividend payment next year = $4.89 Calculate the a) Required return for this stock (1 point): b) Expected return for this stock (1 point): Q5) The market risk premium for next period is 8.80% and the risk-free rate is 1.40% Stock Z has a beta of 1.23 and an expected return of 13.50%. What is the: a) Market's reward-to-risk ratio? (1 point) b) Stock Z's reward-to-risk ratio (1 point): There is a 33.40% probability of a below average economy and a 66.60% probability of an average economy. If there is a below average economy stocks A and B will have returns of -7.20% and 14.00%. respectively. If there is an average economy stocks A and B will have returns of 19.30% and -5.80%, respectively. Compute the: a) Expected Return for Stock A (0.75 points): Q2) There is a 48.10% probability of an average economy and a 51.90% probability of an above average economy. You invest 31.80% of your money in Stock S and 68.20% of your money in Stock T. In an average economy the expected returns for Stock S and Stock Tare 10.50% and 6.90%, respectively. In an above average economy the the expected returns for Stock S and T are 36.80% and 31.30%, respectively. What is the expected return for this two stock portfolio? (2 points) Q3) You are invested 28.70% in growth stocks with a beta of 1.56. 22.40% in value stocks with a beta of 0.73, and 48.90% in the market portfolio. What is the beta of your portfolio? (1 point) Q4) An analyst gathered the following information for a stock and market parameters: stock beta = 1.41; expected return on the Market 9.20% expected retum on T-bills 2.60% current stock Price = $6.53 expected stock price in one year = $8.28, expected dividend payment next year = $4.89 Calculate the a) Required return for this stock (1 point): b) Expected return for this stock (1 point): Q5) The market risk premium for next period is 8.80% and the risk-free rate is 1.40% Stock Z has a beta of 1.23 and an expected return of 13.50%. What is the: a) Market's reward-to-risk ratio? (1 point) b) Stock Z's reward-to-risk ratio (1 point):

Answer rating: 100% (QA)

Lets solve each question step by step Q1 Expected Return for Stock A Given Probability of below average economy 3340 Probability of average economy 66... View the full answer