Consider the following information. Your portfolio is invested 40% percent each in Apple and 60% percent in Tesla. What is the standard deviation of 23 this 24 Weight 40% 60% 25 Apple Tesla State Probability 26 Return Return 27 Boom 25% 30% 50% 28 Normal 50% 10% 20% 29 Recession 25% -10% -20%

Portfolio X has an actual return of 20% Beta = 1.30 Market return = 15% Risk free = 4% Calculate Alpha. Show the arbitrage portfolio to capture Alpha. If you can borrow on margin $1,000,000, what is your arbitrage profit in dollars?

The expected return and standard deviation of a portfolio that is 60 percent invested in 3 Doors, Incorporated, and 40 percent invested in Down Company are the following: Expected return, E(R) Standard deviation, o 3 Doors, Down Incorporated Company 10% 33 Correlation +1 Correlation 0 Correlation-1 What is the standard deviation if the correlation is +1? 0? -1? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. 11% 44 Standard Deviation % % %

4. Consider the following information. Your portfolio is invested 30 percent each in A and C, and 40 percent in B. What is the expected return and standard deviation of this portfolio? (10 marks) State of Probability of Rate of Return if State Occurs Economy State of Economy Stock A Stock B Stock C Boom 0.15 0.30 0.45 0.33 Good 0.45 0.12 0.10 0.15 Poor 0.35 0.01 -0.15 -0.05 Bust 0.05 -0.06 -0.30 -0.09

Q1. One of your company's customer has approached you and the customer says that he wishes to invest 20,000 OMR. Following data is provided for your reference Company name Expected returns R Standard Deviations o Euro Foods 20 | 10 Sohar Foods 14 8. A. Calculate the expected returns for the suggested portfolios as below, Portfolio Euro Foods Sohar Foods 1. 25% 1 75% 75% 25% 3. 50% 50% B. Calculate the coefficient of variation of shares on Euro Foods and Sohar Foods. C. 89 F C H/2

K Consider an economy with two types of firms, S and I. S firms all move together. I firms move independently. For both types of firms, there is a 29% probability that the firm will have a 24% return and a 71% probability that the firm will have a -11% return. What is the volatility (standard deviation) of a portfolio that consists of an equal investment in: a. 40 firms of type S? b. 40 firms of type I? a. What is the volatility (standard deviation) of a portfolio that consists of an equal investment in 40 firms of type S? Standard deviation is%. (Round to two decimal places.) b. What is the volatility (standard deviation) of a portfolio that consists of an equal investment in 40 firms of type I? Standard deviation is %. (Round to two decimal places.)

Sample Problem: Investment Market Rate 12% 10% ? 15% A B с D Beta 1.5 (.5) 1.0 ? CAPM ? ? 10% 12% If risk free rate is at 2%, supply the missing values of the summarized table for the portfolio of investment.

14.  John Lewis of Hungerford plc may have returns next year as follows:  Return        probability  10%              30%  20%              20%  -10%             30%  -20%             20%  What is the standard deviation of returns for John Lewis?   A. 24.65%   B. 15.86%   C. 14.83%   D. 22.25%

Question a    The expected return and standard deviation of a portfolio that is 50 percent invested in 3 Doors, Incorporated, and 50 percent invested in Down Company. are the following: 3 Doors, Incorporated Down Company Expected return, E(R) 14% 10% Standard deviation, σ 42 31 What is the standard deviation if the correlation is +1? 0? −1?  Full explain this question and text typing work only     We should answer our question within 2 hours takes more time then we will reduce Rating Dont ignore this line

Consider an economy with two types of firms, S and I. S firms all move together. I firms move independently. For both types of firms, there is a 64% probability that the firm will have a 25% return and a 36% probability that the firm will have a -2% return. What is the volatility (standard deviation) of a portfolio that consists of an equal investment in: a. 40 firms of type S? b. 40 firms of type l? a. What is the volatility (standard deviation) of a portfolio that consists of an equal investment in 40 firms of type S? Standard deviation is%. (Round to two decimal places.)