f. Estimate Bartman's and Reynolds's betas by running regressions of their returns against the index's returns. Round your answers to four decimal places.Bartman's beta: fill in the blank 30Reynolds's beta: fill in the blank 31Are these betas consistent with your graph?These betas consistent with the scatter diagrams.g. Assume that the risk-free rate on long-term Treasury bonds is 4.5%. Assume also that the average annual return on the Winslow 5000 is not a good estimate of the market's required return—it is too high. So use 9% as the expected return on the market. Use the SML equation to calculate the two companies' required returns. Round your answers to two decimal places.Bartman's required return: fill in the blank 33 %Reynolds's required return: fill in the blank 34 %h. If you formed a portfolio that consisted of 50% Bartman and 50% Reynolds, what would the portfolio's beta and required return be? Round your answer for the portfolio's beta to four decimal places and for the portfolio's required return to two decimal places.Portfolio's beta: fill in the blank 35Portfolio's required return: fill in the blank 36 %i. Suppose an investor wants to include Bartman Industries's stock in his portfolio. Stocks A, B, and C are currently in the portfolio, and their betas are 0.829, 0.969, and 1.486, respectively. Calculate the new portfolio's required return if it consists of 30% of Bartman, 10% of Stock A, 40% of Stock B, and 20% of Stock C. Round your answer to two decimal places.fill in the blank 37 % Please help in solving with excel. I am having trouble getting the rest of the problem. for d. Assume the risk-free rate during this time was 2% and round to four decimal places. 2019201820172016AverageStandard deviation-4.4760.274.6658.9428.80%%Coefficient of variation%%%b. Calculate the standard deviations of the returns for Bartman, Reynolds, and the Winslow 5000. (Hint: Use the sample standard deviation formula, whichcorresponds to the STDEV.S function in Excel.) Round your answers to two decimal places.Bartman Industries30.03%14.21 %-12.19 %-1.76 ✔ %12.38 ✔ %2.01%Reynolds Inc.11.11%Bartman Industries0.95861.02 %31.84 %16.44 %21.15 %19.85 %Reynolds Inc.5.54c. Calculate the coefficients of variation for Bartman, Reynolds, and the Winslow 5000. Round your answers to two decimal places.Bartman Industries1.04Winslow 50000.61Winslow 5000Reynolds Inc.0.1812.17d. Assume the risk-free rate during this time was 2%. Calculate the Sharpe ratios for Bartman, Reynolds, and the Index over this period using their average returns.Round your answers to four decimal places.%Winslow 5000Sharpe ratioe. Construct a scatter diagram that shows Bartman's and Reynolds's returns on the vertical axis and the Winslow 5000 Index's returns on the horizontal axis.Choose the correct graph.The correct graph is graph B✔✔✔ Excel Activity: Evaluating Risk and ReturnBartman Industries's and Reynolds Inc.'s stock prices and dividends, along with the Winslow 5000 Index, are shown here for the period 2015-2020. The Winslow 5000data are adjusted to include dividends.Year202020192018201720162015Bartman IndustriesStock Price$17.2514.7516.5510.9511.377.72Dividend$1.131.061.000.950.900.85Year2020Reynolds Inc.Bartman Industries24.61Stock Price%$49.2553.5049.2559.0562.6057.75Dividend$2.852.752.602.452.302.10The data has been collected in the Microsoft Excel file below. Download the spreadsheet and perform the required analysis to answer the questions below. Do not roundintermediate calculations. Use a minus sign to enter negative values, if any.-2.62XDownload spreadsheet Evaluating Risk and Return-75da4d.xlsxa. Use the data to calculate annual rates of return for Bartman, Reynolds, and the Winslow 5000 Index. Then calculate each entity's average return over the 5-yearperiod. (Hint: Remember, returns are calculated by subtracting the beginning price from the ending price to get the capital gain or loss, adding the dividend tothe capital gain or loss, and dividing the result by the beginning price. Assume that dividends are already included in the index. Also, you cannot calculate therate of return for 2015 because you do not have 2014 data.) Round your answers to two decimal places.Reynolds Inc.Winslow 5000Includes Dividends$11,119.998,631.618,544.666,481.17%5,566.254,594.61Winslow 500028.83%

Given: Bartman Industries Reynolds Inc Winslow 5000 Year Stock Price Dividend Stock Price…

Estimate Bartman's and Reynolds's betas by running regressions of their returns against the index's returns. Round your answers to four decimal places. Bartman's beta: fill in the blank 30 Reynolds's beta: fill in the blank 31 Are these betas consistent with your graph? These betas consistent with the scatter diagrams. g. Assume that the risk-free rate on long-term Treasury bonds is 4.5%. Assume also that the average annual return on the Winslow 5000 is not a good estimate of the market's required return—it is too high. So use 9% as the expected return on the market. Use the SML equation to calculate the two companies' required returns. Round your answers to two decimal places. Bartman's required return: fill in the blank 33 % Reynolds's required return: fill in the blank 34 % h. If you formed a portfolio that consisted of 50% Bartman and 50% Reynolds, what would the portfolio's beta and required return be? Round your answer for the portfolio's beta to four decimal places and for the portfolio's required return to two decimal places. Portfolio's beta: fill in the blank 35 Portfolio's required return: fill in the blank 36 % i. Suppose an investor wants to include Bartman Industries's stock in his portfolio. Stocks A, B, and C are currently in the portfolio, and their betas are 0.829, 0.969, and 1.486, respectively. Calculate the new portfolio's required return if it consists of 30% of Bartman, 10% of Stock A, 40% of Stock B, and 20% of Stock C. Round your answer to two decimal places. fill in the blank 37 % Please help in solving with excel. I am having trouble getting the rest of the problem. for d. Assume the risk-free rate during this time was 2% and round to four decimal places.

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter11: Investment Planning

Section: Chapter Questions

Problem 7FPE: Using the Value Line Investment Survey report in Exhibit 11.5, find the following information for...

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f. Estimate Bartman's and Reynolds's betas by running regressions of their returns against the index's returns. Round your answers to four decimal places.

Bartman's beta: fill in the blank 30

Reynolds's beta: fill in the blank 31

Are these betas consistent with your graph?

These betas

consistent with the scatter diagrams.

g. Assume that the risk-free rate on long-term Treasury bonds is 4.5%. Assume also that the average annual return on the Winslow 5000 is not a good estimate of the market's required return—it is too high. So use 9% as the expected return on the market. Use the SML equation to calculate the two companies' required returns. Round your answers to two decimal places.

Bartman's required return: fill in the blank 33 %

Reynolds's required return: fill in the blank 34 %

h. If you formed a portfolio that consisted of 50% Bartman and 50% Reynolds, what would the portfolio's beta and required return be? Round your answer for the portfolio's beta to four decimal places and for the portfolio's required return to two decimal places.

Portfolio's beta: fill in the blank 35

Portfolio's required return: fill in the blank 36 %

i. Suppose an investor wants to include Bartman Industries's stock in his portfolio. Stocks A, B, and C are currently in the portfolio, and their betas are 0.829, 0.969, and 1.486, respectively. Calculate the new portfolio's required return if it consists of 30% of Bartman, 10% of Stock A, 40% of Stock B, and 20% of Stock C. Round your answer to two decimal places.

fill in the blank 37 %

Please help in solving with excel. I am having trouble getting the rest of the problem.

for d. Assume the risk-free rate during this time was 2% and round to four decimal places.

2019
2018
2017
2016
Average
Standard deviation
-4.47
60.27
4.66
58.94
28.80
%
%
Coefficient of variation
%
%
%
b. Calculate the standard deviations of the returns for Bartman, Reynolds, and the Winslow 5000. (Hint: Use the sample standard deviation formula, which
corresponds to the STDEV.S function in Excel.) Round your answers to two decimal places.
Bartman Industries
30.03%
14.21 %
-12.19 %
-1.76 ✔ %
12.38 ✔ %
2.01
%
Reynolds Inc.
11.11%
Bartman Industries
0.9586
1.02 %
31.84 %
16.44 %
21.15 %
19.85 %
Reynolds Inc.
5.54
c. Calculate the coefficients of variation for Bartman, Reynolds, and the Winslow 5000. Round your answers to two decimal places.
Bartman Industries
1.04
Winslow 5000
0.61
Winslow 5000
Reynolds Inc.
0.18
12.17
d. Assume the risk-free rate during this time was 2%. Calculate the Sharpe ratios for Bartman, Reynolds, and the Index over this period using their average returns.
Round your answers to four decimal places.
%
Winslow 5000
Sharpe ratio
e. Construct a scatter diagram that shows Bartman's and Reynolds's returns on the vertical axis and the Winslow 5000 Index's returns on the horizontal axis.
Choose the correct graph.
The correct graph is graph B✔✔✔

Excel Activity: Evaluating Risk and Return
Bartman Industries's and Reynolds Inc.'s stock prices and dividends, along with the Winslow 5000 Index, are shown here for the period 2015-2020. The Winslow 5000
data are adjusted to include dividends.
Year
2020
2019
2018
2017
2016
2015
Bartman Industries
Stock Price
$17.25
14.75
16.55
10.95
11.37
7.72
Dividend
$1.13
1.06
1.00
0.95
0.90
0.85
Year
2020
Reynolds Inc.
Bartman Industries
24.61
Stock Price
%
$49.25
53.50
49.25
59.05
62.60
57.75
Dividend
$2.85
2.75
2.60
2.45
2.30
2.10
The data has been collected in the Microsoft Excel file below. Download the spreadsheet and perform the required analysis to answer the questions below. Do not round
intermediate calculations. Use a minus sign to enter negative values, if any.
-2.62
X
Download spreadsheet Evaluating Risk and Return-75da4d.xlsx
a. Use the data to calculate annual rates of return for Bartman, Reynolds, and the Winslow 5000 Index. Then calculate each entity's average return over the 5-year
period. (Hint: Remember, returns are calculated by subtracting the beginning price from the ending price to get the capital gain or loss, adding the dividend to
the capital gain or loss, and dividing the result by the beginning price. Assume that dividends are already included in the index. Also, you cannot calculate the
rate of return for 2015 because you do not have 2014 data.) Round your answers to two decimal places.
Reynolds Inc.
Winslow 5000
Includes Dividends
$11,119.99
8,631.61
8,544.66
6,481.17
%
5,566.25
4,594.61
Winslow 5000
28.83
%

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