Problem 11-01 Given the monthly returns that follow, find the R2, alpha, and beta of the portfolio. Compute the average return differential with and without sign. Do not round intermediate calculations. Round your answers to two decimal places. Month R²: Alpha: % Beta: Average return difference (with signs): Average return difference (without signs) Portfolio Return S&P 500 Return January 5.6% 6.0% February -2.5 -2.9 March -1.8 -1.5 April 2.7 2.1 May 0.8 0.2 June -1.2 -0.9 July 0.2 0.6 August 1.8 2.0 September -0.7 -0.2 October -3.5 -4.3 November 2.9 2.0 December 0.6 0.2 % %

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%

Problem 9-21 Risk, Return, and Their Relationship (LG9-3, LG9-4)Consider the following annual returns of Estee Lauder and Lowes Companies: Estee LauderLowes CompaniesYear 123.9%6.0%Year 224.016.6Year 318.14.7Year 450.444.0Year 517.314.0Compute each stocks average return, standard deviation, and coefficient of variation.Note: Round your answers to 2 decimal places.

QUESTION 11 A 30 year 1/1 ARM has an initial rate of 3.75%. In the future, the rate will reset to 325 basis points above the LIBOR index with no rate caps or floors. In 1 year, at the time of the first reset, the LIBOR is 1%. What will be the fully indexed rate at the first reset? OA. 7.00% O B. 1.00% O C. 4.75% O D.4.25%

QUESTION 12 Use the table below to answer questions 12 through 15. What is the portfolio tracking error? O A. 81.35 basis points OB. 86.35 basis points O C. 83.35 basis points D. 80.35 basis points Month January February March April May June July August September October November December Portfolio A's Return (%) 2.15 0.89 1.15 -0.47 1.71 0.10 1.04 2.70 0.66 2.15 -1.38 -0.59 Benchmark Index Return (%) 1.65 -0.10 0.52 -0.60 0.65 0.33 2.31 1.10 1.23 2.02 -0.61 -1.20

Problem 8-14 Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA = 4.0% +0.50RM + eA RB = -1.2% + 0.70RM + eB OM 17%; R-squareд = 0.26; R-squareg = 0.18 Assume you create a portfolio Q, with investment proportions of 0.40 in a risky portfolio P, 0.35 in the market index, and 0.25 in T-bill. Portfolio Pis composed of 70% Stock A and 30% Stock B. a. What is the standard deviation of portfolio Q? (Calculate using numbers in decimal form, not percentages. Do not round intermediate calculations. Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Standard deviation 10.98 c. What is the "firm-specific" risk of portfolio Q? (Calculate using numbers in decimal form, not percentages. Do not round intermediate calculations. Round your answer to 4 decimal places.) Firm-specific % Answer is complete but not entirely correct. 0.0025 x

Digital Executive Cheese Fruit January +14 +7 February -3 +1 March +5 +4 April +7 +13 May -4 +2 June +3 +5 July -2 -3 August -8 -2 Required: a-1. Calculate the variance and standard deviation of each stock. a-2. Which stock is riskier if held on its own? b. Now calculate the returns in each month of a portfolio that invests an equal amount each month in the two stocks. c. Is the variance more or less than halfway between the variance of the two individual stocks? Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B Req C Now calculate the returns in each month of a portfolio that invests an equal amount each month in the two stocks. Note: Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places. Month January February March April May June July August Portfolio Return

EXPLAIN STEP BY STEP

which one is correct please confirm? QUESTION 17 Unlike long-term financial forecasts, short-term financial forecasts (one year or less) tend to be more ___________.   a. speculative   b. helpful   c. strategic   d. detailed