Question

In: Finance

calculate the ERp and STDp- assuming weights of 30%, 40% and 30% in stocks A, B,...

calculate the ERp and STDp- assuming weights of 30%, 40% and 30% in stocks A, B, and C. Also, what range of returns would you expect to see 95% of the time. Assuming a normal distribution and your mean whats the ERp? Economy Probability ETF A ETF B ETF C Good .30 .25 .20 .10 Normal .45 .15 .10 .05 Poor .25 .05 -.05 .10

Expert Solution

Good Scenario

Expected return of portfolio in Good scenario = (30% × 25%) + (40% × 20%) + (30% × 10%)

= 7.50% + 8.00% + 3.00%

= 18.50%

Expected return of portfolio in Good scenario is 18.50%.

Normal Scenario

Expected return of portfolio in Normal scenario = (30% × 15%) + (40% × 10%) + (30% × 5%)

= 4.50% + 4.00% + 1.50%

= 10.00%

Expected return of portfolio in Normal scenario is 10.00%.

Poor Scenario

Expected return of portfolio in Poor scenario = (30% × 5%) + (40% × -5%) + (30% × 10%)

= 1.50% - 2.00% - 3%

= 2.50%

Expected return of portfolio in Poor scenario is 2.50%.

Now,

Expected return and standard deviation of portfolio is calculated in excel and screen shot provided below:

Expected return of portfolio is 10.68% and standard deviation of portfolio is 6.34%.

jeff jeffy answered 1 year ago

Stocks A and B have the following data. Assuming the stock market is efficient and the...

Stocks A and B have the following data. Assuming the stock market is efficient and the stocks are in equilibrium. a. What is the dividend yield for each stock? b. Based on your answer to questions in a. what will the dividend for each stock be next year? c. What was the dividend for each stock be this year? A B Required return 8% 13% Market price $15 $4 Expected growth 6% 12%

Given the data {20, 20, 30, 30, 40, 40, 50, 50, 60, 60}, calculate 1. Gini...

Given the data {20, 20, 30, 30, 40, 40, 50, 50, 60, 60}, calculate 1. Gini coefficient using the quintile distribution. 2. Draw the Lorenz curve with proper labels.

A survey shows that 30% of adults own stocks and 40% own mutual funds. A sample...

A survey shows that 30% of adults own stocks and 40% own mutual funds. A sample of 10 adults is chosen. Use binomial distribution to answer the following questions. (a) (7 points) What is the probability that there will be less than 2 adults owning mutual funds? Answer: ___________________________ (b) (6 points) Determine the probability that there will be at least 2 adults owning stocks. Answer: __________________________________ (c) (6 points) Determine the variance of the number of adults...

30. Assuming that water vapor is an ideal gas with ν = 6, calculate the following...

30. Assuming that water vapor is an ideal gas with ν = 6, calculate the following for one mole: (a) The enthalpy at 400 ◦C and 3 atm pressure; (b) the enthalpy at 100 ◦C and 1 atm pressure; (c) the enthalpy of one mole of liquid water at 100 ◦C and 1 atm pressure. Hint: H = E + (pV), with E = Q − W; Q can be obtained from the latent heat and W = pV is...

Given the following information, calculate the beta for the portfolio of stocks A, B, and C....

Given the following information, calculate the beta for the portfolio of stocks A, B, and C. (Answer to the nearest tenth). Amount Stock Invested Beta Stock A $7,000 1.2 Stock B $1,000 1.3 Stock C $4,000 0.5

Assuming 100% dissociation, calculate the freezing point ( ?f ) and boiling point ( ?b )...

Assuming 100% dissociation, calculate the freezing point ( ?f ) and boiling point ( ?b ) of 2.84 ? K3PO4(aq) . Colligative constants can be found in the chempendix. ?f= ∘C ?b= ∘C help please

Assuming a 5/1 ARM, calculate the monthly mortgage payment on a 30 year $200,000 mortgage with...

Assuming a 5/1 ARM, calculate the monthly mortgage payment on a 30 year $200,000 mortgage with an initial rate of 2.75%, a rate of 4% at the time of the first adjustment, a rate of 5% at second adjustment and a rate of 4% at the third adjustment.

Group A Group B Subject 1 40 30 Subject 2 42 45 Subject 3 30 38...

Group A Group B Subject 1 40 30 Subject 2 42 45 Subject 3 30 38 Subject 4 37 32 Subject 5 23 28 A small hypothetical study explored the response to two treatments where each subject in the study received both treatments (e.g. in a cross-over design). The data are given below 1) Analyze the information using a paired t-test (e.g. with GraphPad) a) What is the observed value of the test statistic from this test? b) What can...

1. Three stocks have share prices of $12 (A), $75 (B), and $30 (C) with total...

1. Three stocks have share prices of $12 (A), $75 (B), and $30 (C) with total market values of $400 million, $350 million, and $150 million, respectively. If you were to construct a price-weighted index of the three stocks, what would be the index value? If one year late the stock price of A (+10%), B (+6%) and C (-8%), what would be the new value and return of this index? Show all calculations. 2. Use the information of the...

Practice Calculations Calculate monthly C.O.G.S. assuming a 30% mark-up and the following 6 month’s sales figures:...

Practice Calculations Calculate monthly C.O.G.S. assuming a 30% mark-up and the following 6 month’s sales figures: $4000, $4500, $5000, $6000, $7500, $7500. Repeat calculations assuming gross contribution margin of 40%. Assuming average monthly sales of $50,000 and average monthly C.O.G.S. of $30,000, calculate the expected level of Receivables if average collection period is 55 days. Inventory if you plan on average 40 days on hand. Assuming annual sales of $250,000 and a 50% gross (contribution) margin, calculate the following Average...