Senior management of Nancy's Nooks (NN) has determined there is a 30 percent chance EPS will be $5.50 next year, there is a 60 percent chance EPS will be $3.00, and there is a 10 percent chance EPS will be -$3.40. Calculate the expected value, standard deviation, and coefficient of variation for NN's forecasted EPS. Do not round intermediate calculations. Round your answers for the expected value and standard deviation to the nearest cent and for the coefficient of variation to two decimal places. Expected value: $   Standard deviation: $   Coefficient of variation:

You are going to invest in Asset J and Asset S. Asset J has an expected return of 13.6 percent and a standard deviation of 54.6 percent. Asset S has an expected return of 10.6 percent and a standard deviation of 19.6 percent. The correlation between the two assets is 0.50. What are the standard deviation and expected return of the minimum variance portfolio? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Expected return Standard deviation % %

Your current portfolio is 100% invested in the market. You are considering investing some of your money in a portfolio run by Big Alpha Asset Management (BAAM). BAAM's returns have been quite good over the last five years. In order to understand by how much you could improve the Sharpe Ratio of your current portfolio by putting some of your money in BAAM, you run the following regression using past annualized returns on both the market and BAAM: RBAAM, Rft = a₁ + Bi (RM₁t - Rft) + €₁,t You estimate the following coefficients, which are all statistically significant: a=0.09; 3= 1.2 Additionally, you estimate the volatility of the residuals from the cove regression (idiosyncratic volatility) to be 0.14. In that same period the market's annualized volatility was 0.2078. Additionally, you expect the market's excess return to be 0.05 over the coming year. If you believe that the above estimates are representative of what will happen in the coming year, what is the maximum Sharpe Ratio you…

Jerry Allen graduated from the University of Arizona with a degree in Finance in 2011 and took a job with an investment banking firm as a financial analyst. One of his first assignment is to investigate the investor-expected rate of return for technology firms: Apple (APPL), Dell (DELL) and Hewlett Packard (HPQ). Jerry’s supervisor suggested that he make his estimates using CAPM where the risk-free rate is 4.5%. the expected return on the market is 10.5% 1.      Calculate the risk premium of the market show all the working formula where applicable/    2.      Calculate the expected return using CAPM equation using a beta coefficient of 2.00    3.      Solve the expected return for Apple using the beta from Yahoo and the beta from MSN and a risk-free rate of 4.5% and a market risk premium of 6% yield    4.      Calculate the expected return with the CAPM equation using each of the following beta estimates for the three technology firms. Present the information in a tabulated format