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In: Finance
What is the expected return on a portfolio? How can the expected return on a portfolio...
What is the expected return on a portfolio? How can the expected return on a portfolio be manipulated to minimize the risk on that portfolio? Justify your answer
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The following are the expected returns on a portfolio of investments. What is the expected rate of return on the portfolio?
The following are the expected returns on a portfolio of investments. What is the expected rate of return on the portfolio? Investment # of shares Price per share Expected returnA. 2000 $20 10%B. 3000 $10 15%C. 1000 $15 8%
If a portfolio has a positive weight for each asset, can the expected return on the...
If a portfolio has a positive weight for each asset, can the
expected return on the portfolio be greater than the return on the
asset in the portfolio that has the highest return? Can theexpected
return on the portfolio be less that the return on the asset in the
portfolio with the lowest return? Explain.
If a portfolio has a positive weight for each asset, can the expected return on the...
If a portfolio has a positive weight for each asset, can the
expected return on the portfolio be greater than the return on the
asset in the portfolio that has the highest return? Can theexpected
return on the portfolio be less that the return on the asset in the
portfolio with the lowest return? Explain
What is the expected return on an equally weighted portfolio of these three stocks?
Consider the following
information:
Rate of Return if State Occurs
State of Economy
Probability
of
State of Economy
Stock A
Stock B
Stock C
Boom
0.74
0.23
0.25
0.17
Bust
0.26
0.11
0.15
0.11
Requirement
1:
What is the expected return on an equally weighted portfolio of
these three stocks? (Do not round your intermediate
calculations.)
(Click to select)19.24%21.74%31.27%34.04%13.51%
Requirement
2:
What is the variance of a portfolio invested 10 percent each in
A and B and 80 percent in...
How do you measure the expected return & risk of a portfolio? How the concept of...
How do you measure the expected return & risk of a
portfolio? How the concept of correlation between asset returns is
used in portfolio diversification? Explain.
4. Assume that the portfolio expected return for asset one is 0.15 and the expected return...
4. Assume that the portfolio expected return for asset one is
0.15 and the expected return for asset two is 0.10. The variance of
both returns is one and the correlation between the returns is
0.75. Assume equal weighting for each asset. Compute the expected
return and variance of the portfolio. Assume that the risk free
rate is 0.05. Compute the Sharpe ratio of the portfolio. Now
allocate 0.60 to asset one and 0.40 to asset two. Recompute all the...
1.how to Calculate the expected rate of return and volatility for a portfolio of investments and...
1.how to Calculate the expected rate of return and volatility
for a portfolio of investments and describe how diversification
affects the returns to a portfolio of investments ?
2.Understand the concept of systematic risk for an individual
investment and calculate portfolio systematic risk (beta).
3.Estimate an investor’s required rate of return using the
Capital Asset Pricing Model.
Calculate the expected return and standard deviation of the portfolio.
A portfolio consists of two stocks:
Stock Expected Return Standard Deviation Weight
Stock 1 10% 15% 0.30
Stock 2 13% 20% ???
The correlation between the two stocks’ return is 0.50
Calculate the expected return and standard deviation of the portfolio.
Expected Return:
Standard Deviation:
(i) Briefly explain, in general, when there would be “benefits of diversification” (for any portfolio of two securities).
(ii) Describe whether the above portfolio would...
Your portfolio is invested 25% each in A and C, and 50 percent in B. What is the expected return of the portfolio?
Consider the following information:
State of Economy
Probability of State of Economy
Stock A
Stock B
Stock C
Boom
.05
0.55
0.60
0.47
Good
.15
0.46
0.25
0.28
Poor
.35
-0.01
-0.06
-0.04
Bust
.45
-0.12
-0.10
-0.09
a. Your portfolio is invested 25% each in A and C, and 50 percent in B. What is the expected return of the portfolio?
b. What is the variance of this portfolio? The standard deviation?
The risk free rate of return is 3%, the expected return on themarket portfolio is...
The risk free rate of return is 3%, the expected return on the
market portfolio is 11% and the stock of Xyr Corp has a beta
coefficient of 1.2. Kyr pays out 35% of its earnings in dividends
and the latest earnings announced were $7.50/share. Dividends were
just paid and are expected to be paid annually. You expect that Xyr
will earn an RoE of 19% per year on all reinvested earnings
forever.a. What is the intrinsic value of a...
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