Consider a world that only consists of the three stocks shown in the following table: a. Calculate the total value of all shares outstanding currently. b. What fraction of the total value outstanding does each stock make up? c. You hold the market portfolio, that is, you have picked portfolio weights equal to the answer to part b with each stock's weight is equal to its contribution to the fraction of the total value of all stocks. What is the expected return of your portfolio? Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Total Number Current Price per of Shares Outstanding Share $111 $120 $30 Stock First Bank Fast Mover Funny Bone 107 million 46 million 207 million Expected Return 17% 11% 16% X

Consider a world that only consists of the three stocks shown in the following table: a. Calculate the total value of all shares outstanding currently. b. What fraction of the total value outstanding does each stock make up? c. You hold the market portfolio, that is, you have picked portfolio weights equal to the answer to part b with each stock's weight is equal to its contribution to the fraction of the total value of all stocks. What is the expected return of your portfolio? Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Total Number Current Price per of Shares Outstanding Share $111 $120 $30 Stock First Bank Fast Mover Funny Bone 107 million 46 million 207 million Expected Return 17% 11% 16% X

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter12: Investing In Stocks And Bonds

Section: Chapter Questions

Problem 4LO

See similar textbooks

Similar questions

Stocks A and B have the following returns: (Click on the following icon o in order to copy its contents into a spreadsheet.) Stock A Stock B 1 0.09 0.04 0.06 0.03 3. 0.12 0.06 4 - 0.04 0.02 5 0.09 -0.02 a. What are the expected returns of the two stocks? b. What are the standard deviations of the returns of the two stocks? c. If their correlation is 0.47, what is the expected return and standard deviation of a portfolio of 51% stock A and 49% stock B? a. What are the expected returns of the two stocks? The expected return for stock A is (Round to three decimal places.)
Beta of a portfolio. The beta of four stocks-G, H, I, and J-are 0.42, 0.75, 1.19, and 1.65, respectively. What is the beta of a portfolio with the following weights in each asset: ? What is the beta of portfolio 1? (Round to two decimal places.) Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Portfolio 1 Portfolio 2 Portfolio 3 Weight in Stock G 25% 30% 10% Weight in Stock H 25% 40% 20% Weight in Stock I 25% 20% 40% Weight in Stock J 25% 10% 30% - X
Stocks A and B have the following returns: (Click on the folowing icon a in order to copy its contents into a spreadsheet.) Stock A Stock B 0.08 0.06 0.15 0.05 0.04 0.05 0.01 -0.01 0.09 -0.03 a. What are the expected roturns of the two stocks? b. What are the standard deviations of the returns of the two stocks? c. If their correlation is 048, what is the expected return and standard deviation of a portfolio of 75% stock A and 25% stock B? a. What are the expected returns of the two stocks? The expected return for stock A is (Round to three decimal places.)
)If you are asked to construct your own portfolio by using information about the individual stocks in the excel spreadsheet, are there any stocks which you should not include in your portfolio? Can you provide your justifications? (You may draw performance graphs of one stock against the market portfolio).
The following table represents the rate of returns of two stocks in different economic conditions along with their probabilities (the data are also uploaded on moodle) RATES OF RETURN ON STOCKS EXPECTED ECONOMIC PROBABILITY STOCK A STOCK B CONDITIONS RECESSION 0.55 -0.04 -0.02 STABLE 0.35 0.25 0.30 EXPANDING 0.10 0.15 0.20 Answer the following by using mathematical calculations: a) Calculate the expected rate of return for each stock respectively. Explain what the expected value implies. b) Calculate the standard deviation for each stock respectively. Explain what the standard deviation implies. c) If you were an investor in which stock you were going to invest? Justify your answer. d) Calculate the covariance between Stock A and stock B. Discuss. e) Calculate the expected return and the standard deviation of the portfolio consisting 40% in stock A and 60% in stock B. f) Discuss the risk and return associated with investing i All of your funds in stock A ii. All of your funds in stock…
You a portfolio manager. You have been provided the following information on stock prices and dividends. Based on the given information, what is the geometric average return on this stock? Please show all the calculations by which you came up with the final answer.
Consider a world that only consists of the three stocks shown in the following table: a. Calculate the total value of all shares outstanding currently. b. What fraction of the total value outstanding does each stock make up? c. You hold the market portfolio, that is, you have picked portfolio weights equal to the answer to part b with each stock's weight is equal to its contribution to the fraction of the total value of all stocks. What is the expected return of your portfolio?
Stocks A and B have the following returns: Stock A 0.09 0.04 0.13 -0.04 0.09 1 2 3 4 5 (Click on the following icon in order to copy its contents into a spreadsheet.) Stock B 0.04 0.03 0.04 0.01 -0.04 a. What are the expected returns of the two stocks? b. What are the standard deviations of the returns of the two stocks? c. If their correlation is 0.48, what is the expected return and standard deviation of a portfolio of 75% stock A and 25% stock B? a. What are the expected returns of the two stocks? The expected return for stock A is. (Round to three decimal places.)
Stocks A and B have the following returns: (Click on the following icon in order to copy its contents into a spreadsheet.) 123 45 Stock A 0.09 0.07 0.13 -0.01 0.09 Stock B 0.05 0.01 0.06 0.02 -0.04 a. What are the expected returns of the two stocks? b. What are the standard deviations of the returns of the two stocks? c. If their correlation is 0.42, what is the expected return and standard deviation of a portfolio of 60% stock A and 40% stock B?
You decide to form a portfolio of the following amounts invested in the following stocks. What is the beta of the portfolio? SET YOUR CALCULATOR TO 4 DECIMAL PLACES THEN INPUT THE ANSWER ROUNDING TO 2 DECIMALS i.e. if your answer is 1.2455, enter it as 1.25. Amount Beta $5,817 1.65 Microsoft $4,128 0.54 $2,818 1.67 $8,782 2.27 Stock Apple Ford Time Warner Expected Return 10.50% 16.90% 15.75% 11.80%
Consider a world that only consists of the three stocks shown in the following table: (1)Calculate the total value of all shares outstanding currently. (2)What fraction of the total value outstanding does each stock make up? (3)You hold the market portfolio, that is, you have picked portfolio weights equal to the answer to part b (that is, each stock’s weight is equal to its contribution to the fraction of the total value of all stocks). What is the expected return of your portfolio?
looking for help solving standard deviation for stock x and stock y, preferably with instructions on how to solve in excel.