Explain the meaning of 32 and 12 in the payoff table. Which security would you consider for investment based on the expected return? Which security would you consider for investment based on risk?   Advise on the optimum rational decision and explain why?

(Security market line) You are considering the construction of a portfolio comprised of equal investments in each of four different stocks. The betas for each stock are found below Asset A Beta 2.30 B C D 0.80 0.60 -1.60 (Click on the icon in order to copy its contents into a spreadsheet.) a. What is the portfolio beta for your proposed investment portfolio? b. How would a 25 percent increase in the expected return on the market impact the expected return of your portfolio? c. How would a 25 percent decrease in the expected return on the market impact the expected return on each asset? d. If you are interested in decreasing the beta of your portfolio by changing your portfolio allocation in two stocks, which stock would you decrease and which would you increase? Why? a. The portfolio beta for your proposed investment portfolio is (Round to three decimal places)

A portrollo consists of assets with the following expected returns: Technology stocks Pharmaceutical stocks Utility stocks Savings account a. What is the expected return on the portfolio if the investor spends an equal amount on each asset? Round your answer to two decimal places. % 26% 16 9 4 b. What is the expected return on the portfolio if the investor puts 53 percent of available funds in technology stocks, 15 percent in pharmaceutical stocks, 14 percent in utility stocks, and 18 percent in the savings account? Round your answer to two decimal places. %

(Capital Asset Pricing​ Model)  The expected return for the general market is 10.5 ​percent, and the risk premium in the market is 6.8 percent. ​ Tasaco, LBM, and Exxos have betas of 0.809​, 0.677​, and 0.578​, respectively. What are the appropriate expected rates of return for the three​ securities?       Question content area bottom Part 1 The appropriate expected return of Tasaco is enter your response here​%. ​(Round to two decimal​ places.) Part 2 The appropriate expected return of LBM is enter your response here​%. ​(Round to two decimal​ places.) Part 3 The appropriate expected return of Exxos is enter your response here​%. ​(Round to two decimal​ places.)

You are facing three stock investment alternatives, Stock A, Stock B and Stock C. Given the following information, please indicate which stock is (are) overvalued, which stock is (are) undervalued, and which stock is (are) correctly priced based on the required returns calculation using the Capital Asset Pricing Model (CAPM or Security Market Line=SML). The risk free rate is 3% and the risk premium for the market index return is 5%.  Please Show Work   Expected   Stocks Returns BETA A 14% 1.2 B 8% 0.67 C 20% 2.5

You already submitted an Investment Proposal. The second part of your Investment Project is a follow-up of your Investment Proposal, with a short reflection essay about the securities you recommended in your Investment proposal. You have to provide an updated Table showing your portfolio. Make sure to include the gain or losses of each individual securities, your total holding-period return, and the effective annual rate (EAR). You should include in the analysis at least one of the securities you recommended to buy in your first report. How did it go? Did it go as planned? Why do you think it did not go as planned? You may also analyze some of your winners and losers in your portfolio (they could be others than the ones you justified in the first report). Any regrets? What would you have done differently after what you have learned in this course? There is no unique way to do a reflection essay. What are in your opinion the essential lessons from this course?  The length of the…

Assume the one period binomial model with initial share price £400, up and down factors u = 1.25, d = 0.9 and interest compounded at nominal rate (per time period) of 5%. Consider an option with payoff (S(0) + S(1))/2. The replicating portfolio for this option at time 0 will have shares and pounds in a bank. State your answers to three significant figures.

Start with A-C and I will submit seperately for D! Thank you :)

Parts A-C have already been answered, looking for answer D.

You are given the following information for Securities J and K for the coming year: State of Nature Probability Return J 20.00% 14.00% 50.00% 19.00% 30.00% 16.00% 1 2 3 Return K 14.00% 16.00% 25.00% You create a portfolio, with 40 percent of your money invested in Security K, and the rest of your money invested in Security J. Given this information, determine the standard deviation of this portfolio for the coming year. O 0.0301 O 0.0239 O 0.0195 O 0.0263 O 0.0154