Calculate the expected return for Stock media Prima and Stock Astro 2. Calculate the standard deviation for Stock media Prima and Stock Astro 3. Calculate the covariance and correlation of coefficient for the above stock.
Q: Answer the following by using mathematical calculations: a) Calculate the expected rate of return…
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Q: Given the re-stated information below (and expected returns you should have already calculated),…
A: State Prob (Pi) Return A (Ra) Return B (Rb) Pi(Ra) Pi(Rb) Dep 0.1 -0.25 0.04 -0.025 0.004 Rec…
Q: The metric that is used to show the extent to which a given stock’s return move up and down with the…
A: A trend is the wide upward or downward movement of a stock's price over time. Upward movement is…
Q: if the covariance of a stock A with the market M is 0.15 and the standard deviation of the market…
A: Covarianceof a stock A with the market M=0.15Standard devation=36%
Q: If the correlation between stock ABC Ltd and market is 0.5, standard deviation on market portfolio…
A: Correlation between stock and market (r) = 0.5 Standard deviation on market portfolio (sdM) = 25…
Q: Exercises: a. The standard deviation of returns is 0.30 for Stock A and 0.20 for Stock B. The…
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Q: Assume the risk-free rate is 2%. Calculate the stock's expected return, standard deviation,…
A: Expected rate of return on stock is that rate which an investor can expect to be generated from the…
Q: Estimate the return and standard deviation of the historical returns on Stock A that were: 15%, 20%,…
A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…
Q: each stock. Which stock is most desirable according to this measure? (b) Compute the standard…
A: (Since you have posted multiple sub-part questions, we will solve the first three questions for you.…
Q: b) The covariance between stocks A and B is 0.0014, standard deviation of stock A is 0.032, and…
A: Returns do not rise in the proportion to the level of the risk assumed. Therefore, b the figure is…
Q: The market and Stock ) have the following probablity distributions: Probability TH 0.3 14% 19% 0.4…
A: Expected Return = sum of (Probability * Return) Variance = Sum of (Probability *(Return-Mean)^2)…
Q: The historical rate of return on stock A was regressed on the rate of return of stock M (the…
A: Solution- Total variance of security =standard deviation of security^2…
Q: The table below contains the covariance matrix of stock returns and the market. Assume that the…
A: Risk is the possibility of loss for an organization and risk management is one of the most important…
Q: Suppose the beta estimated from the CAPM for stock A is 2.3 and stock B is 1.1. What is the beta…
A: CAPM stands for the Capital Asset Pricing Model. It defines the relationship of the systematic risk…
Q: Stocks A and B have the following returns: (Click on the following icon o in order to copy its…
A:
Q: Stock A Return Probability of the Return 18% 25% 14 50 10 25 Stock B Return Probability of the…
A: a. EA = ∑N RN ×PN................(1) Where, N= no of scenario R= return in different scenario P=…
Q: Suppose that the index model for stocks A and B is estimated from excess returns with the following…
A: The mathematical equation for correlation computation is:
Q: A stock’s returns have the following distribution: Calculate the stock’s expected return,…
A: Given:
Q: А. Compute the standard deviation of each stock. В. What is the covariance and correlation…
A: The mathematical measure of market uncertainty is the standard deviation. In stocks the standard…
Q: What is the standard deviation of stock A if it has the following probabilities and rate of returns.…
A: Expected return can be defined as the weighted average of the distribution of probable returns of…
Q: b) The covariance between stocks A and B is 0.0014, standard deviation of stock A is 0.032, and…
A: Correlation determines how assets move in relation to each other. A coefficient of 1 means a perfect…
Q: What is the correlation coefficient of the returns of the stock and the returns of the market?
A: Correlation: It is a measure of statistics used to show the degree of association between two…
Q: (Expected Rate of Return and Risk) Syntex, Inc. is considering an investment in one of two common…
A: Coefficient of Variation =Standard deviation/ Mean
Q: Consider the following two investment proposals and their returns under different economic…
A: given, economic scenario probability return on GE stock return on TI stock bear 0.5 25% -2%…
Q: Interpret your results in (c) above, assuming that the historical average return of 8.5% from the…
A: d) In part c, at a rate of 8.59% the stock is considered to be fairly priced. However, since the…
Q: Calculate the expected rate of return for each stock. (2 decimal) places Stock A Expected Return %…
A: The given problem relates to risk and return associated with stocks. Expected return is computed as…
Q: a. Given the information in the table, the expected rate of return for stock A is enter your…
A: Expected Rate of Return = (Probability 1 x Return 1) + (Probability 2 x Return 2) + (Probability 3 x…
Q: 1. Assume a two-factor model explains stock returns. Regression estimates of stocks A and B on the…
A: For a two- factor model, expected return is the function of the factors and return of the factors.…
Q: Stock A Stock B Market Standard Deviation Return Correlation Coefficient between A & M Correlation…
A: The Capital Asset Pricing Model(CAPM) refers to the relationship between expected return for assets…
Q: You are given the following probability distribution for a stock: Probability Outcome…
A: A) The computation of expected return: Hence, the expected return is 6%.
Q: Is the following statement correct, wrong or partially correc? Why? "If the volatility of Stock A is…
A: This statement is CORRECT.
Q: Assume the risk-free rate is 2%. Calculate the stock's expected return, standard deviation,…
A: Here we have to find out expected return by using probability method.
Q: The interpretation of stock beta coefficient requires an assumption of an average stock which has a…
A: Beta is a measure of a security's systematic risk which cannot be diversified and measures the…
Q: a. Determine graphically the beta coefficients for Stocks A and B. b. Graph the Security Market…
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Q: Determine graphically the beta coefficients for Stocks A and B. b. Graph the Security Market Line,…
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Q: Which stock do you advise Ahmed to select according to the required rate of return? And explain why?
A: Beta is an estimate of risk prevailing in the market. When risk prevailing in the economy is…
Q: Question content area bottom Part 1 a. Given the information in the table, the expected rate…
A: Since you have posted a question with multiple sub-parts, we will solve the first three subparts for…
Q: What is the coefficient of variation for stock A?
A: Information Provided: Stock A expected return = 8% Stock A risk = 6%
Q: Question 1 Suppose you have the following expectations about the market condition and the returns…
A: Let i = 1, 2 & 3 represent the three states of market namely, Bear, Normal and Bull.Pi =…
Q: You run a regression for a stock's return on a market index and find the following Excel output:…
A: The regression analysis shows the value of intercept and the slope ie (The Risk free return and the…
Q: Q4: Assume the following information for stocks A and B. • Expected return on Stock A = 18%. •…
A: The expected return on the stock refers to the minimum required rate on the investment they made in…
Q: Calculate and interpret the correlations between the two assets
A: Correlation of two assets helps to determine the relation between the two assets. The correlation…
Q: The covariance between the returns on two stock is 0.0425. The standard deviations of stocks A and B…
A: Covariance = 0.0425 Standard deviation of stock A = 0.2041 Standard deviation of stock B = 0.2944
Q: Firm A's stock returns are correlated with market returns at 0.90, while Firm B's stock returns are…
A: Solution:- Beta means the sensitivity of stock with respect to market.
Q: Assume the risk-free rate is r = 3%. Consider the data in the table below: Stock Expected Return…
A: The capital market line (CML) represents portfolios that optimally combine risk and return. capital…
Q: Given the following information, determine which beta coefficient for stock A is consistent with…
A: Expected return (rs) = 10.1% Risk free rate (rRF) = 3.2% Market return (rM) = 11.2%
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- QUESTION 1 Aisyah is a new investor; she approached RHB Securities and the firm has provided her with the following information. Probability (%) Expected return (%) Stock X Stock Y 20 13 15 30 14 13 50 15 12 Using these stocks, she has identified two investment portfolio alternatives: Alternative 1 50% Stock X, 50% Stock Y Alternative 2 60% Stock X, 40% Stock Y Required: a. Calculatethe expected return and the standard deviation for Stock X and Stock Y.A close family friend has approached you to help her determine which of the two common stocksshe should invest in. Common Stock A Common Stock BProbability Return Probability Return 0.3 11% 0.2 -5% 0.4 15% 0.3 6% 0.3 19% 0.3 14% 0.2 22%Required:a) Calculate the expected returns of stock A b) Determine the risk (standard deviation) and return of stock Ac) Calculate the expected returns of stock B d) Determine the risk (standard deviation) and return of stock Be) Which investment should your friend invest in?Question 1 Amanda Tam cannot decide whether to invest in Stock Hewlett or Stock Packard, or in a portfolio which is a combination of both stocks. She has approached OSK Securities and the firm has provided her with the following information: Probability (%) 30 20 20 30 Using these stocks, she has identified two investment portfolio alternatives: Alternative 1 2 Expected return (%) Stock Hewlett 13 14 15 16 Stock Packard 15 13 12 11 Portfolio 100% of Hewlett 40% of Hewlett and 60% of Packard a. Calculate the portfolio return and standard deviation for each alternative. b. Based on the findings above, which of the two alternatives would she choose? Explain your answer.
- A close family friend has approached you to help her determine which of the two common stocks she should invest in Common Stock A Common Stock B Probability Return Probability Return 0.25 11% 0.25 -5% 0.15 15% 0.25 6% 0.6 19% 0.25 14% 0.25 22% Required: Calculate the expected returns of stock A Determine the risk (standard deviation) and return of stock A Calculate the expected returns of stock B Determine the risk (standard deviation) and return of stock B Which investment should your friend invest in? Jenny has decided that she will invest her $100,000 savings in stocks as follows: What rate of return should Jenny expects to receive on her portfolio? Company Percentage of Investment Expected rate of return Standards Company Limited 45% 9% Starbucks 15% 12% Treasury Bill 40% 4%A close family friend has approached you to help her determine which of the two common stocks she should invest in. Common Stock A Common stock B Probability Return Probability Return 0.25 11% 0.25 -5% 0.15 15% 0.25 6% 0.6 19% 0.25 14% 0.25 22% Required: Calculate the expected returns of stock A Determine the risk (standard deviation) and return of stock A Calculate the expected returns of stock B Determine the risk (standard deviation) and return of stock B Which investment should your friend invest in?For DePaul Inc. what is the return for year 2. Round to no decimal points and use the % symbol (27%...not 27.12%)
- Question: State Probability Return on Stock XXX Cement Return on Stock YYY Cement Return on Stock ZZZ Cement 1 25% 21 23 20 2 15% 19 25 22 3 20% 20 24 24 4 15% 22 22 26 5 Find? 23 26 28 Use the above information and to answer the following: Assume you are the investor who wants to invest in a two stock/security portfolio made from the above Stocks of your choice? a) Find the expected return of your portfolio formed from the stocks of your choice given above AND you decide the weights for the stocks in the portfolio. b) Calculate your returns from the portfolio assuming you invest $ 15000 c) Find the Covariance and correlation coefficient for your portfolio d) Justify as to on what basis did you choose these stocks and how did you decide the weights?You are planning for long term investment in a stock. After specific analysis you have two options i.e., Stocks of Company A and Stocks of Company B. You have following data on the stock prices of both companies; Time Line Share A Share B 2010 15 125 2020 41 320 Please select the share that is more likely give you better return in the long run. Also, show your selection process.Use the data table to answer the question that follows. Stock A Stock B Stock C 52W high; 52W low $87.54; $32.21 $9.68; $6.25 $37.11; $35.92 Div 0 $0.05 $0.75 P/E 36 20 7.9 Close $85.43 $6.98 $36.87 An investor's primary concern with adding a new stock to their portfolio is value for the price paid. Which stock should they choose and why? Stock B, because lower-priced stocks are more likely to be good deals in the financial market Stock B, because its P/E ratio means that it is earning more per share than its price Stock C, because its relatively lower P/E ratio indicates the others may be overvalued Stock C, because its relatively higher Div value means it is the best overall deal
- Consider information given in the table below and answers the question asked thereafter: State Probability return on stock A Return on stock B A 0.15 10% 9% B 0.15 6% 15% C 0.10 20% 10% D 0.18 5% -8% E 0.12 -10% 20% F 0.30 8% 5% i. Calculate expected return on each stock? On the basis of this measure, which stockyou will choose?ii. Calculate standard deviation of the returns on each stock? On the basis of thismeasure, which stock you will choose?iii. Calculate coefficient of variance of the returns on each stock? On the basis of thismeasure, which stock you will choose?Required Rate of Return As an equity analyst you are concerned with what will happen to the required return to Universal Toddler' stock as market conditions change. Suppose rRF = 8%, rM = 9%, and bUT = 2.2. Under current conditions, what is rUT, the required rate of return on UT Stock? Round your answer to two decimal places._____%1.1. Refer to the following information on joint stock returns for stock 1, 2, and 3 in the table: Probability Return for stock Stock 1 0.20 -0.05 Stock 2 0.25 Stock 3 0.10 0.20 0.30 0.25 0.25 0.05 0.10 0.05 -0.10 0.10 -0.05 If you must choose only two stocks to your investment portfolio, what would be your choice? a) stocks 1 and 2 b) stocks 1 and 3 c) stocks 2 and 3 d) other decision. Present your arguments and calculations, to explain your decision. 1.2. Refer to the following observations for stock A and the market portfolio in the table: Month Rate of return Market portfolio 0,12 Stock A 0.30 0.24 0,08 -0.10 -0,02 0,08 -0,04 4 0,10 0,06 6. 0,10 0,07 a) Calculate the main statistic measures to explain the relationship between stock A and the market portfolio: i) The sample covariance between rate of return for the stock A and the market. ii) The sample Beta factor of stock A. iii) The sample correlation coefficient between the rates of return of the stock A and the market. iv) The…