a. Calculate the portfolio return over the 4-year period for each of the 3 alternatives. % (Round to two decimal places.) Alternative 1: Data table (Click on the icon here in order to copy its contents of the data table be a spreadsheet.) Year 2021 2022 2023 2024 Expected Return Asset A Asset B Asset C 8% 10% 4% 10% 8% 6% 12% 6% 8% 14% 4% 10% Data table (Click on the icon here in order to copy its contents of the data tab a spreadsheet.) Alternative 1 2 3 Investment 100% of asset A 40% of asset A and 60% of asset B 40% of asset A and 60% of asset C

a. Calculate the portfolio return over the 4-year period for each of the 3 alternatives. % (Round to two decimal places.) Alternative 1: Data table (Click on the icon here in order to copy its contents of the data table be a spreadsheet.) Year 2021 2022 2023 2024 Expected Return Asset A Asset B Asset C 8% 10% 4% 10% 8% 6% 12% 6% 8% 14% 4% 10% Data table (Click on the icon here in order to copy its contents of the data tab a spreadsheet.) Alternative 1 2 3 Investment 100% of asset A 40% of asset A and 60% of asset B 40% of asset A and 60% of asset C

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Asset M Asset N j P?? Return, ?? P?? Return, ?? 1 0.25 10% 0.15 10% 2 0.25 -6% 0.30 8% 3 0.15 2% 0.20 15% 4 0.20 5% 0.05 0% 5 0.15 20% 0.30 -2% Calculate the expected value of return, ?̅, for each of the two assets. Which provides the largest expected return? Calculate the standard deviation, ?? , for each of the two assets’ returns. Which appears to have the greatest risk? Calculate the portfolio expected return if you invest 27% of your wealth in M and 73% inN, of your total wealth of $40,000.
Which asset in the following table has the most market risk (also known as systematic or non- diversifiable risk)? Asset Return Beta Standard Deviation Asset A 11% 0.95 35% Asset B 13% 1.00 35% Asset C 9% 1.20 30% 1.) Asset C 2.) All three Assets 3.) Asset B 4.) Asset A and Asset B 5.) Asset A
Compute the VaR(95%) and ES(95%) of the portfolio managed by Absolute Asset Management if its returns, r, follow the distribution specified below: = 1 10 - |r 100| – 10
PLEASE ANSWER ALL THE QUESTIONS Question 1 Fill the parts in the above table that are shaded in yellow. You will notice that there are nine line items. Question 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) If an investment’s expected return (mean return) does not plot on the SML, what does it show? Identify undervalued/overvalued investments from the graph Question 3 From the information generated in the previous two questions; a) Identify two investment alternatives that can be combined in a portfolio. Assume a 50-50 investment allocation in each investment alternative. b) Compute the expected return of the portfolio thus formed. c) Compute the portfolio’s beta. Is the portfolio aggressive or defensive?
Set up the complete formula for Dollar Weighted Return (DWR) for the following portfolio including final value of the portfolio. Year 0 1 2 3 4 Actions at the ending of the year (Yr0)Starting with $1000 (Yr1)Adding $100 (Yr2)Withdrawing $200 (Yr3)Adding $300 (Yr4)Ending Value = ? ROR during each Yr (Yr0) - (Yr1) 8% (Yr2)-4% (Yr3) 9% (Yr4) 3% A. Calculate the time weighted return (TWR) Complete Questions with respect to Excel
Example 9: What is the portfolio standard deviation for a two-asset portfolio comprised of the following two assets if the correlation of their returns is 0.5? Asset A Asset B Expected return Stańdard deviation of expected returns 10% 20% 5% 20% Amount invested 740,000 760,000
(Portfolio beta and CAPM) You are putting together a portfolio made up of four different stocks. However, you are considering two possible weightings: a. What is the beta on each portfolio? b. Which portfolio is riskier? c. If the risk-free rate of interest were 5 percent and the market risk premium were 6.5 percent, what rate of return would you expect to earn from each of the portfolios? a. The beta on the first portfolio is (Round to three decimal places.)
K Capital asset pricing model (CAPM) For the asset shown in the following table, use the capital asset pricing model to find the required return. (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Risk free rate, Re 2% The required return for the asset is (Round to two decimal places) Market return, f 8% CONTE Beta, b 0.2
akeAssignmentMain.do?invoker%3D&takeAssignmentSessionLocator=&inprogress%3false hapter 11 Lab Application 全回 Sign ia еBook You have been depositing money into an account yearly based on the following investment amounts, rates and times, what is the value of that investment account at the end of that period? (Click here to see present value and future value tables) Amounts of Value at the End Investment Rate Times of the Period $7,000 20% 16 years 612,094.91X $11,000 15% 9 years 184,644.26X $15,000 12% 5 years 95,292.71 X $36,000 10% 2 years 75,600.00 Feedback > Check My Work For each scenario, use the rate and time components to use the applicable time value of money table to determine the needed factor. Multiply the investment amount by the future value factor to determine the value of end of the period. 6:38 PM G O 4) ENG 13 68°F Sunny 10/26/2021 O P Type here to search hp %24 %24 %24
Capital asset pricing model (CAPM) For the asset shown in the following table, use the capital asset pricing model to find the required return. (Click on the icon here O in order to copy the contents of the data table below into a spreadsheet.) ne Risk-free Market rate, R return, rm Beta, b nts 4% 0.7 1% The required return for the asset is %. (Round to two decimal places.) eТext edia Librai ial Calculat er Resource Enter your answer in the answer box and then click Check Answer. Check Answer mic Study ules Clear All All parts showing 10: DExercise(14); ools > This course (Introduction to Finance (FIN-101-D02) Distance Spring 2021) is hased on Zutter/Smart Princinles of Managerial Finance Rrief Re 4/13 O Type here to search insert
Capital asset pricing model (CAPM) For the asset shown in the following table, use the capital asset pricing model to find the required return. (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Risk-free rate, RF 9% The required return for the asset is %. (Round to two decimal places.) Market return, m 14% Beta, b 1.4
For each of the investments below, calculate the rate of return earned over the period. Investment Cash Flow During Period - $300 18,000 с 5,000 D 60 E 1,500 (Click on the icon here in order to copy the contents of the data table above into a spreadsheet.) A B The rate of return on Investment A is %. (Round to two decimal places.) Beginning-of-Period End-of-Period Value Value $2,100 160,000 40,000 300 12,000 $700 113,000 45,000 100 13,200

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