You own a portfolio containing the following stocks.

	Stock A	Stock B	Stock C	Stock D
$ Amount	$9,000	$6,000	$5,000	$10,000
Expected return	10.65%	12.89%	15.95%	10.12%
Stock beta	1.10	0.90	1.30	1.05

Calculate the following statistics: (1/100 of one percent without % sign, e.g. 12.671, if a negative percentage, -9.56):

Expected portfolio return:

 

17) You own a portfolio containing the following stocks.

You would like to combine a risky stock with a beta of 1.5 with Treasury bills in such a way that the risk level of the portfolio is equivalent to the risk level of the overall market. What percentage of the portfolio should be invested in Treasury bills?

18) An firm is considering a portfolio with equal weighting in a cyclical stock and a countercyclical stock. It is expected that there will be three economic states; Good, Average and Bad, each with equal probabilities of occurrence. The cyclical stock is expected to have returns of 12%, 5% and 1% in Good, Average and Bad economies respectively. The countercyclical stock is expected to have returns of -8%, 2% and 14% in Good, Average and Bad economies respectively. Given this information, calculate portfolio variance.

19) You hold a portfolio of securities which have had the following annual returns:  {4%, 18%, -22%, 0%, 20%, 10%}.  You believe that these returns are normally distributed.  What is the probability that the return in any given year will be less than the arithmetic mean?

Answer rating: 100% (QA)

Okay here are the solutions 1 Expected portfolio return Stock A 9000 1065 95750 Stock B 6000 1289 77... View the full answer