Compute daily abnomal returns of MRK and RXDX on the announcement day. Since April 16, 2023 was Sunday (= no trading), use the following trading day, April 17, 2023, as the announcement day for this analysis. Use daily returns on SPY (S&P500 ETF) as benchmark retums during the same period and 0.018% as daily risk free rate. Show your work in Excel to receive any credit. 10 4/12/2023 113.75 11 4/13/2023 115.58 12 4/14/2023 115.31 -0.23% 13 4/17/2023 115.01 -0.26% 4 4/18/2023 114.83 1.12% 1.61% 4/12/2023 112.25 -1.51% 4/13/2023 112.86 0.54% 4/14/2023 114.01 1.02% 4/17/2023 193.51 69.73% 4/12/2023 408.05 -0.41% 4/13/2023 413.47 1.33% -0.16% 4/18/2023 193.5 -0.01% 4/14/2023 412.46 -0.24% 4/17/2023 4/18/2023 414.21 413.94 0.36% 0.07% MRX RXDX SPY

Assignant. How to use real Dato to draw the Efficient Frontier? Step: Choose 2 Stocks collect Date for 1 year (daily) Prices Colorlate Returns (daily returns) Pt+1 - Pt Pt R 7,41 STEP 2 6 。Comporte the Expected Return for each stock E(R) = Average Return = Σ Ri - • Compte Risk (6;) => √2 (2:-R)2 R mpute the CORR between the 2 stocks Compute Comply for cov) for

Suppose that S = $100, K = $100, r = 0.08, σ = 0.30, δ = 0, and T = 1. Construct a standard two-period binomial stock price tree using the method in Chapter 10. consider stock price averages computed by averaging the 6-month and 1-year prices. What are the possible arithmetic and geometric averages after 1 year? Construct a binomial tree for the average. How many nodes does it have after 1 year? (Hint: While the moves ud and du give the same year-1 price, they do not give the same average in year 1.) What is the price of an Asian arithmetic average price call? What is the price of an Asian geometric average price call?

Can the answer be given in excel format...

For the upcoming year, the risk-free rate is 2 percent, and the expected return to the market is 7 percent. You are also given the following covariance matrix for Securities J,K, andL. \table[[Covariance,Security J,Security K,Security L],[Security J,0.0012532,0.0010344,0.0019711],[Security K,0.0010344,0.0023717,0.0013558],[Security L,0.0019711,0.0013558,0.0048442]] Also assume that you form a portfolio by putting 0 percent of your funds in Security J, 40 percent of your funds in Security K, and 60 percent of your funds in Security L. Based on this information, determine the standard deviation of the resulting portfolio. ◻ 6.47% 5.27% 4.98% 5.82% 4.77%

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The following information is provided:   The risk-free rate is 2% The expected market returns are 11%   If the beta of an asset changes from 0.8 to 1.5, what is the additional return that  you require on this asset (in %, please round on 2 decimals)?

Indicate whether the following statements are true or false (circle one). Use 1 or 2 sentences to discuss why it is so. (a) If R, is simple 1-month return, then the annualized return is 12 x R, after assuming all R = R. True False Why? (b) Let and r GSA be continuously compounded 1 - month returns for Goldman Sachs Group (GS) and American International Group (AIG). If we construct a portfolio using the share ain[0, 1] for GS, the portfolio cc return is ľ AIG = 0x*y +(1-x)*r True False Why? (c) In 5. (b)., if 5% quantile of the portfolio cc return is given as AIG, GS, r 40.05 = -0.5, then 5% monthly Value-at-Risk for the $10,000 investment in this portfolio is $10,000 × (-0.5) = -$ 5,000. True False r

Calculate the rate of return on a price-weighted index of the three stocks for the first period (t = 0 to t = 1). (Do not round intermediate calculations. Round your answer to 2 decimal places.)   What will be the divisor for the price-weighted index in year 2? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Assume that you are given the following partial covariance and correlation matrices for Securities J, K and the Market. Also assume that the expected risk-free rate for the coming year is 3.0 percent and that the expected risk premium on the market is 7.0 percent. Given this information, determine the required rate of return for Security J for the coming year, using CAPM. J Market Correlation J K Market Covariance J K Market Standard Deviation O 18.48% O 20.20% O 15.48% O 12.71% O 15.04% 0.44 0.86 J 0.014400 J K 0.64 K CAN 0.016900 K 1.00 Market 0.003600 Market