this is the first part of my question which I managed to solve but you are gonna need it to solve the second part which I NEED HELP in. Model the following investment decision as an Influence Diagram: a high-risk stock - $200 brokerage fee Payoff- $1700 if the market goes up $300 if market stays neutral -$800 if the market goes down a low-risk stock - $200 brokerage fee Payoff- $1200 if the market goes up $400 if market stays neutral $100 if the market goes down Student 1 hour ago a savings account that pays a sure $500 P(Market Up)=0.480, P(Market Flat) = 0.297, and P(Market Down) = 1-P(Market Up)-P(Market Flat). Student 1 hour ago

You are concerned about the market volatifity but have found stocks that are attractively priced. In addition to cash, your portfolio will have securities both on the LONG and SHORT sides. You want to set up your LONG/SHORT portfolio with some constraints You will set aside 14.67% of the equity as a cash reserve to cushion any adverse margin changes and to pay any associated fees. You will maximize your buying and selling power (L.e. what you can purchase and sell on margin) using the remaining equity and loans from the broker. Your account's beginning equity is $222,990 all in cash before you start trading. You will set up your 100% beta-neutral trade on full margin, and the margin requirements are 50% on both sides. Assume that the LONG side has a weighted average beta of 0.59, while the SHORT side has a weighted average beta of 1.00. What is the value of your account's total liabilities immediately after you set up the portfolio? $254,361 $260,883 $267,406 $273,928 $280,450

You are trying to plan your investments for the next year. You have decided that the market will either be strong (a bull market), weak (a bear market) or normal. You think that stocks, bonds, and bills will earn the following returns in these scenarios: Scenario Bull market Normal market Bear market Probability 0.20 0.55 0.25 Stock Bond Return Return 0.25 0.10 -0.15 0.06 0.04 -0.02 Bill Return 0.03 0.03 0.03 You have also decided that you have a risk-aversion (A) of 4. (a) What is the expected return for each of the securities? (b) What is the volatility of each security return? (c) What is the covariance between stock and bond returns? (d) If you combine stocks and bills as an investment, what is your op- timal combination? What is your expected return? What is your portfolio's volatility? (e) If you combine bonds and bills, what is your optimal combination? What is your expected return? What is your portfolio's volatility? (f) If you combine stocks and bonds, what is your optimal…

A street analyst is trying to conduct top-down research. In order to realign investment portfolio, he plans to remove the stock that has the lowest market share in its industry. He is currently looking at the following stocks: Stock Name: ABCRevenue: 2,345,678.00Industry Sales: 27,000,579.88 Stock Name: DEFRevenue: 278,000.00Industry Sales: 2,897,000.90 Stock Name: GHIRevenue: 1,334,567.00Industry Sales: 8,700,899.76 Stock Name: JKLRevenue: 4,400,990.00Industry Sales: 6,678,999.00 Stock Name: MNORevenue: 13,000,000.00Industry Sales: 87,994,678.00 Which stock will he remove?

Consider the following two scenarios for the economy and the expected returns in each scenario for the market portfolio, an aggressive stock A, and a defensive stock D. Scenario Bust Boom Market -7% 19 Rate of Return Aggressive Stock A -10% 25 Defensive Stock D -5% 15 Required: a. Find the beta of each stock. b. If each scenario is equally likely, find the expected rate of return on the market portfolio and on each stock. c. If the T-bill rate is 4%, what does the CAPM say about the fair expected rate of return on the two stocks? d. Which stock seems to be a better buy on the basis of your answers to (a) through (c)? > Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Find the beta of each stock. Note: Round your answers to 2 decimal places. Beta Stock A Stock D 3.31 x 1.54

Please show formula and solution A street analyst is trying to conduct top-down research. In order to realign investment portfolio, he plans to remove the stock that has the lowest market share in its industry. He is currently looking at the following stocks: Stock Name: ABC Revenue: 2,345,678.00 Industry Sales: 27,000,579.88 Stock Name: DEF Revenue: 278,000.00 Industry Sales: 2,897,000.90 Stock Name: GHI Revenue: 1,334,567.00 Industry Sales: 8,700,899.76   Stock Name: JKL Revenue: 4,400,990.00 Industry Sales: 6,678,999.00 Stock Name: MNO Revenue: 13,000,000.00  Industry Sales: 87,994,678.00 Which stock will he remove?

1. You think MBB stock has potential for an upward move in price. You have no position whatsoever in the stock now. You would like to take opportunity of any up movement in price but want to strictly limit your downside risk. MBB stock price now is RM 12.00. a. Given the information below, outline TWO possible appropriate strategies. For each strategy, • State the position • Graph the strategy • Outline the risk profile, and • State the maximum profit, maximum loss, and break-even point(s). 30-day calls 30-day put 11 call @ 1.55 11 put @ 0.25 12 call @ 0.70 12 put @ 0.45 12 call @ 0.22 13 put @ 1.40 b. From a cost viewpoint, which is the best strategy?  explainc. What are the recommended options strategies when you expect the markethas extreme (high) volatility? explain

You are concerned about the market volatility but have found stocks that are attractively priced. In additionto cash, your portfolio will have securities both on the LONG and SHORT sides. You want to set up your LONG/SHORT portfolio with some constraints. You will set aside 12.27% of the equity as a cash reserve to cushion any adverse margin changes and to pay any associated fees. You will maximize your buying and selling power (i.e. what you can purchase and sell on margin) using the remaining equity and loans from the broker. Your account's beginning equity is $201,290 all in cash before you start trading. You will set up your 100% beta-neutral trade on full margin, and the margin requirements are 50% on both sides. Assume that the LONG side has a weighted average beta of 1.35, while the SHORT side has a weighted average beta of 1.00. What is the value of your account's total liabilities immediately after you set up the portfolio? O $250,234 $257,185 $264,136 $271,087 $278,038

(a)Jack is considering investing in the stocks. The two stocks are available with the following particulars: Stock Return %Beta Marvel 9.60.75DC8.71.3   As measured by the return on government stock, a risk-free return in the market is 3.6%.Using capital asset pricing model, Calculate:   (i) The rate of return of stock Marvel   (Ii) The rate of return of stock DC   (iii) Which stock should Jack invest in and why?   (b) Explain the advantages and limitations of capital asset pricing model  (This is subpart question nor multiple questions) so I humble request please answer I give up thumb

An investor buys a stock if price rises 5% from the 250-day low and shorts a stock if price falls 5% from the 250-day high. What is this strategy called? Will it work if the market is efficient? Explain why