The following stock price information has been collected for stock XYZ: Closing price End of year 2023 2022 2021 $127 $119 $123 2020 2019 $118 $121 XYZ has a correlation with the market portfolio of 0.60. The S&P 500 market portfolio has a standard deviation of 20%. An investor purchased XYZ at the end of 2019 (when it was $121). What is the average annual holding period return (geometric mean) for this investor if he/she held XYZ until the end of 2023? 1.22% 6.26% None are correct 2.78%
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- Below are the annual returns of the stock A, B, C and D and the market portfolio for the period 2018-2022. Find the expected return and standard deviation of the stock A, B, C, D and the market Year Prob. Asset A Asset B Asset C Asset D Market 2018 0,20 11,00 9,00 12,00 15,00 14,00 2019 0,25 13,00 11,00 15,00 13,00 12,00 2020 0,10 9,00 8,00 11,00 10,00 9,00 2021 0,20 12,00 12,00 11,00 13,00 12,00 2022 0,25 15,00 10,00 9,00 12,00 13,00Stocks A and B have the following historical returns: Stock A's Returns (24.25%) 18.50 38.67 14.33 39.13 Year 2015 2016 2017 2018 2019 Assume the risk-free rate during this time was 3.5%. What are the Sharpe ratios for Stocks A and B and the portfolio over this time period using their average returns? Answers: a) Sharpe ratio for Stock A b) Sharpe ratio for Stock B 0.5332 0.8839 c) Sharpe ratio for Portfolio AB Stock B's Returns 5.50% 26.73 48.25 (4.50) 43.86 Note: enter your answers with 4 decimal placesBelow are the annual returns of the stock A, B, C and D and the market portfolio for the period 2018-2022. Find the expected return and standard deviation of the stock A, B, C, D and the market portfolio. Asset A Asset D | 15,00 13,00 | 10,00 13,00 Prob. Asset B 9,00 Year 2018 2019 2020 2021 2022 Asset C 12,00 Market 14,00 12,00 |11,00 0,20 0,25 | 13,00 9,00 | 11,00 8,00 0,10 0,20 0,25 15,00 | 11,00 11,00 | 9,00 12,00 12,00 9,00 12,00 15,00 10,00 12,00 13,00
- Assume these are the stock market and Treasury bill returns for a 5-year period: Year Stock Market Return (%) T-Bill Return (%) 2016 13.0 0.2 2017 21.0 0.8 2018 -6.2 1.8 2019 29.8 2.1 2020 20.6 0.4 Required: What was the risk premium on common stock in each year? What was the average risk premium? What was the standard deviation of the risk premium? (Ignore that the estimation is from a sample of data.)-- expressed in % (NOTE: 11.31% & 13.68% is incorrect)Assume these are the stock market and Treasury bill returns for a 5-year period: Year Stock Market Return (%) T-Bill Return (%) 2016 13.0 0.2 2017 21.0 0.8 2018 -6.2 1.8 2019 29.8 2.1 2020 20.6 0.4 Required: What was the risk premium on common stock in each year? What was the average risk premium? What was the standard deviation of the risk premium? (Ignore that the estimation is from a sample of data.)Observe the mean, the standard deviation, and the CV of the annual rate of return of the portfolio. Tesla Historical Annual Stock Price Data Year Average Stock Price Year Open Year High Year Low Year Close Annual % Change 2020 289.9971 86.0520 705.6700 72.2440 705.6700 743.44% 2019 54.7060 62.0240 86.1880 35.7940 83.6660 25.70% 2018 63.4620 64.1060 75.9140 50.1120 66.5600 6.89% 2017 62.8633 43.3980 77.0000 43.3980 62.2700 45.70% 2016 41.9535 44.6820 53.0840 28.7340 42.7380 -10.97% 2015 46.0085 43.8620 56.4520 37.0000 48.0020 7.91% 2014 44.6658 30.0200 57.2080 27.8680 44.4820 47.85% 2013 20.8803 7.0720 38.6740 6.5820 30.0858 344.14% 2012 6.2337 5.6160 7.6020 4.5580 6.7740 18.59% 2011 5.3609 5.3240 6.9880 4.3660 5.7120 7.25% 2010 4.6683 4.7780 7.0940 3.1600 5.3260 0.00% Amazon Historical Annual Stock Price Data Year Average Stock Price Year Open Year High Year Low Year Close Annual % Change 2021 3315.9774 3186.6300 3731.4100 2951.9500…
- Stocks A and B have the following historical returns: Year 2016 2017 2018 39.90 2019 (9.70) 2020 20.05 a. Calculate the average rate of return for each stock during the period 2016 through 2020. Round your answers to two decimal places. Stock A: 11.23 % Stock B: 11.23 % b. Assume that someone held a portfolio consisting of 50% of Stock A and 50% of Stock B. What would the realized rate of return on the portfolio have been each year? Round your answers to two decimal places. Negative values should be indicated by a minus sign. Portfolio Stock A's Returns, ra (18.60%) 34.25 14.75 (1.00) 26.75 CV Stock A Year 2016 Ⓡ 2017 % 2018 2019 2020 -16.55 27.33 Stock B's Returns, ra (14.50% ) 20.40 27.33 › › -5.35 23.40 What would the average return on the portfolio have been during this period? Round your answer to two decimal places. % % 11.23 c. Calculate the standard deviation of returns for each stock and for the portfolio. Round your answers to two decimal places. Stock B Stock A Portfolio %…Given the information in the table below, what is the covariance between the return series of stock A and B. Round your answer! A B Year Past Returns Past Return 2017 20 16 2018 2 12 2019 -2 9 ER] 6.67 11.33 STD 11.72 3.51 W 50.00% 50.00% PAB 0.9638 None of the answers is correct 55.24 50.33 33.12 39.65You are considering an investment in either individual stocks or a portfolio of stocks. The two stocks you are researching, Stock A and Stock B, have the following historical returns: Year FA 2015 -22.00% -4.00% 2016 34.00 17.00 2017 29.00 -15.00 2018 -2.00 46.00 2019 30.00 25.00 a. Calculate the average rate of return for each stock during the S-year period. Do not round intermediate calculations. Round your answers to bvo decimal places. Stock A: 13.80 % Stock B: 13.80 % b. Suppose you had held a portfolio consisting of 50% of Stock A and 50% of Stock B. What would have been the realized rate of return on the portfolio in each year? What would have been the average return on the portfolio during this period? Do not round intermediate calculations. Round your answers to two decimal places. Negative values, if any, should be indicated by a minus sign. Year Portfolio 2015 13 % 2016 25.50 % 2017 7 % 2018 22 % 2019 27.50 % Average return 13.80 % c. Calulate the standard deviation of…
- Stocks C and F have the following historical returns: Year return (HPY) of C return (HPY) of F 2016 −18.00% −14.50% 2017 33.00% 21.80% 2018 15.00 % 30.50% 2019 −0.50% −7.60% 2020 27.00% 26.30% Required Calculate the geometric rate of return for each stock during the 5-year period. Calculate the standard deviation of returns for each stock. Calculate the coefficient of variation for each stock. If you are a risk-averse investor then, assuming these are your only choices, discuss whether you would prefer to hold Stock C or Stock F.A prospective investor obtained the following information on XY stock: Date Stock Prices ($) Dividends Paid 4/01/2020 61.25 2/02/2020 52.38 0.75 4/05/2020 64.88 0.75 30/06/2020 70.50 0.75 25/10/2020 75.75 0.75 30/12/2020 71.00 Calculate the time-weighted rate of return using both the Linking and Index methods.Assume these are the stock market and Treasury bill returns for a 5-year period: Year 2016 2017 2018 2019 2020 Stock Market Return (%) 33.30 13.20 -3.50 14.50 23.80 Required: a. What was the risk premium on common stock in each year? b. What was the average risk premium? c. What was the standard deviation of the risk premium? (Ignore that the estimation is from a sample of data.) 3 Required A Required B T-Bill Return Complete this question by entering your answers in the tabs below. Standard deviation (%) 0.12 0.12 0.12 0.07 0.09 x Answer is complete but not entirely correct. Required C What was the standard deviation of the risk premium? (Ignore that the estimation is from a sample of data.) Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. 13.69 X % घ