Question
In: Finance
The following table lists returns on the market portfolio and on Microsoft, each year from 1989...
- The following table lists returns on the market portfolio and on Microsoft, each year from 1989 to 1998.
|
Year |
Microsoft (%) |
Market Portfolio (%) |
|
1989 |
80.95 |
31.49 |
|
1990 |
-47.37 |
-3.17 |
|
1991 |
31 |
30.57 |
|
1992 |
132.44 |
7.58 |
|
1993 |
32.02 |
10.36 |
|
1994 |
25.37 |
2.55 |
|
1995 |
-28.57 |
37.57 |
|
1996 |
0.00 |
22.68 |
|
1997 |
11.67 |
33.10 |
|
1998 |
36.19 |
28.32 |
- A) Estimate the covariance in returns between Microsoft and the market portfolio.
- B) Estimate the variances in returns on both investments.
- C) Estimate the beta for Microsoft.
Solutions
Expert Solution
I HAVE PROVIDE ANSWERS USING MANUAL CALCULATION AS WELL
AS EXCEL. THANK YOU
jeff jeffy answered 1 year agoRelated Solutions
The following table contains the historic returns from a portfolio consisting of large stocks and a...
The following table contains the historic returns from a
portfolio consisting of large stocks and a portfolio consisting of
long-term Treasury bonds over the last 20 years. T-bills returns
represent risk-free returns. Analyze the risk-return trade-off that
would have characterized these portfolios. The following dataset is
also available in Excel format in Module 3 Resources on Canvas.
Returns in the dataset are in percents. For example, 31.33 means
31.33% per year.
Year
Large Stock
Long-Term
T-Bonds
T-Bills
1997
31.33
11.312...
The following table contains the historic returns from a portfolio consisting of large stocks and a...
The following table contains the historic returns from a
portfolio consisting of large stocks and a portfolio consisting of
long-term Treasury bonds over the last 20 years. T-bills returns
represent risk-free returns. Analyze the risk-return trade-off that
would have characterized these portfolios. The following dataset is
also available in Excel format in Module 3 Resources on Canvas.
Returns in the dataset are in percents. For example, 31.33 means
31.33% per year.
Year
Large Stock
Long-Term
T-Bonds
T-Bills
1997
31.33
11.312...
The table lists the monthly total returns on Dish Network Corp. common stock and the market...
The table lists the monthly total returns on Dish Network Corp.
common stock and the market rates of return for a 24-month period.
Observation Month Dish rate of return (%) Market rate of return (%)
1 Aug 2014 4.75 4.18 2 Sep 2014 -0.35 -2.11 3 Oct 2014 -1.44 2.74 4
Nov 2014 24.76 2.43 5 Dec 2014 -8.21 -0.01 6 Jan 2015 -3.48 -2.77 7
Feb 2015 6.67 5.78 8 Mar 2015 -6.64 -1.01 9 Apr 2015 -3.43 0.42...
The table lists the monthly total returns on Adobe Systems Inc. common stock and the market...
The table lists the monthly total returns on Adobe Systems Inc.
common stock and the market rates of return for a 24-month period.
Observation Month Adobe rate of return (%) Market rate of return
(%) 1 Aug 2014 3.83 4.18 2 Sep 2014 -3.77 -2.11 3 Oct 2014 1.34
2.74 4 Nov 2014 5.08 2.43 5 Dec 2014 -1.33 -0.01 6 Jan 2015 -3.54
-2.77 7 Feb 2015 12.79 5.78 8 Mar 2015 -6.52 -1.01 9 Apr 2015 2.87
0.42...
The possible outcomes for the returns on Stock X and the returns on the market portfolio...
The possible outcomes for the returns on Stock X and the returns
on the market portfolio have been estimated as follows:
Scenario
Stock X
Market Portfolio
1
-3%
6%
2
14%
12%
3
22%
18%
A) 2.1
B) 0.7
C) 1.0
D) none of the above
The possible outcomes for the returns on Stock X and the returns on the market portfolio...
The possible outcomes for the returns on Stock X and the returns
on the market portfolio have been estimated as follows:
Scenario
Stock X
Market portfolio
1
-3%
6%
2
14%
12%
3
22%
18%
Calculate the market beta for Stock X. Round your answer to the
nearest tenth.
A) 2.1
B) 0.7
C) 1.0
D) none of the above
The possible outcomes for the returns on Stock X and the returns on the market portfolio...
The possible outcomes for the returns on Stock X and the returns
on the market portfolio have been estimated as
follows:
Scenario
Stock X
Market
portfolio
1
9%
10%
2
21%
13%
3
13%
11%
Each scenario is considered to be equally likely to occur.
Calculate the covariance of the returns of Stock X and the market
portfolio.
A) 0.03%
B) 0.57%
C)
1.62%
D) 0.06%
The following table lists possible rates of return on HighRisk stock (HR) and on the market...
The following table lists possible rates of return on HighRisk
stock (HR) and on the market (M). Table also lists their joint
probabilities.
RHR
RM
Probability
(RHR, RM)
0.08
0.06
0.10
0.10
0.06
0.20
0.10
0.07
0.25
0.12
0.07
0.10
0.12
0.08
0.15
0.14
0.08
0.20
a. List the possible values for
RHR and the probabilities that correspond to those values. Compute
the expected value, variance, and standard deviation for
RHR.
b. List the possible values for RM and the...
Discrimination in the labor market The following table lists the name, gender, height, and minimum wage...
Discrimination in the labor market
The following table lists the name, gender, height, and minimum
wage 10 people are willing to accept to work as personal assistants
at a prestigious law firm.
Name
Gender
Height
Minimum Wage
(Inches)
(Dollars per week)
Neha
F
66
$309
Alyssa
F
64
$321
Crystal
F
68
$344
Tim
M
70
$367
Brian
M
70
$390
Hilary
F
66
$402
Edison
M
71
$425
Rajiv
M
70
$448
Kevin
M
63
$460
Maria
F
68...
The following table lists the activities needed to complete a project. The first column lists the...
The following table lists the activities needed to complete a
project. The first column lists the activities and the “follows”
column shows which other activity or activities, (if any), must be
completed before these activities can start. The remaining columns
give three estimates of the activity duration; the mean duration
calculated from these estimates and standard deviation assuming a
beta distribution of activity duration.
Activity
Follows
Estimates of durations (days)
Optimistic
Most likely
Pessimistic
A
--
3
6
15
B...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- What is the difference among the principles of modularization, abstraction, encapsulation, and separation of interface and...
- An investment project costs $20,100 and has annual cash flows of $4,400 for six years. ...
- PUT IN JAVA PROGRAMMING The StockB class: Design a class named StockB that contains the following...
- Draw a DFA for the following ( ∑ = {0,1}): Set of all strings with.
- In the article from Forbes notes that the goal of a leader is not to clone...
- Many people keep time using a 24 hour clock (11 is 11am and 23 is 11pm,...
- UNIX ONLY -- DIFFICULT LAB ASSIGNMENT This is an extremely difficult subject for me. Could you...
ADVERTISEMENT