4.What is the expected return, Standard denationand Coeknicient of vanation of an equallywerghted port folLo OF technology, T-bills andinernatin et Funds? tiDW does your Dort folio risk andreturn compane to that Of the Spp500 index? Prob. of state S&P 500Technology T-Bills-15%StateInternational Fund+ 1% GDP.258%5%30%+ 2% GDP.5012%15%15%+ 3% GDP.2516%45%5%0%

Therefore, the expected return for the S&P 500 is 12%. Therefore, the expected return for…

Answered: 4.What is the expected return, Standard…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 13MC: Which of the following discounts future cash flows to their present value at the expected rate of...

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Prob. of state S&P 500 Technology T-Bills -15% State International Fund + 1% GDP .25 8% 5% 30% + 2% GDP .50 12% 15% 15% + 3% GDP .25 16% 45% 5% 0%
Question 2 a) Plot the Security Market Line (SML).b) Superimpose the CAPM’s required return on the SML.c) Indicate which investments will plot on, above and below the SML?d) If an investment’s expected return (mean return) does not plot on the SML, what doesit show? Identify undervalued/overvalued investments from the graph
Plot the Security Market Line (SML) b) Superimpose the CAPM’s required return on the SML c) Indicate which investments will plot on, above and below the SML? d) If an investment’s expected return (mean return) does not plot on the SML, what doesit show? Identify undervalued/overvalued investments from the graph (
Please do a and b separate (Question 2) a) Plot the Security Market Line (SML)b) Superimpose the CAPM’s required return on the SMLc) Indicate which investments will plot on, above and below the SML? d) If an investment’s expected return (mean return) does not plot on the SML, what doesit show? Identify undervalued/overvalued investments from the graph.
Q11. n is the number of periods of an investment, PV is the starting value, FVn is the future value n periods ahead, and ^ means 'to the power of'. What is the correct formula for calculating return? Group of answer choices 1. (FVn/PV)^n - 1 2. (FVn/PV)^n 3. (PV/FVn)^n - 1 4. 1 - (FVn/PV)^n
Supposing the return from an investment has the following probability distribution Return Probability R (%) 8 0.2 10 0.2 12 0.5 14 0.1 Required: What is the expected return of the investment? What is the risk as measured by the standard deviation of expected returns?
A) What does the single index model estimate? B) What is the market risk premium? C) What does Beta show? D) What are all the possible values of Beta and what do they mean?
Consider the following information (Assume that Security M and Security N are in the same financial market): Standard Deviation BetaSecurity M 20% 1.25Security N 30% 0.80 Which security should have higher expected return? Group of answer choices Security M Security N Equal
choose which one ? 3.Assume CAPM holds. What is the correlation between an efficient portfolio and the market portfolio?a.1b.-1c.0d.Not enough information
1. Fill the parts in the above table that are shaded in yellow. 2.Using the data generated in the previous question (Question 1) a. Plot the Security Market Line (SML) b. Superimpose the CAPM’s required return on the SML c.Indicate which investments will plot on, above and below the SML? d.
For CAPM, if we define Rm as the SP500 what is the alpha of the SP500 index fund? Re - Rf = alphabeta (Rm - Rf)
The CAPM states that the expected (required) return on an asset is : E(Ri)=Rf+βi[E(RM)−Rf] where the term in square brackets is the risk-premium earned by the market portfolio. Therefore, the beta of the market portfolio (βM) must be equal to __________ . A) zero B) 0.5 C) 1.0 D) an unknown estimate

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