Question

In: Finance

Your company has decided to investment in the stock market. Management has tasked you to conduct...

Your company has decided to investment in the stock market. Management has tasked you to conduct and assessment of the two stocks listed below

Year

Stock A Ra

Stock B Rb

2014

(18%)

(14,50%)

2015

33

21,8

2016

15

30,5

2017

(0,5)

(7,6)

2018

27

26,3

1.1 Calculate the average rate of return for each stock during the period 2014 through 2018.

1.2 Assume that someone held a portfolio consisting of 50% of Stock A and 50% of Stock B. What would the realised rate of return on the portfolio have been each

year? What would the average return on the portfolio have been during this period?

1.3 Calculate the standard deviation of returns for each stock and for the portfolio.

1.4 Calculate the coefficient of variation for each stock and for the portfolio.

1.5 Assuming you are a risk-averse investor, would you prefer to hold Stock A, Stock B, or the portfolio? Why?

Solutions

Expert Solution

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -

Hope this will help, please do comment if you need any further explanation. Your feedback would be appreciated.

jeff jeffy answered 10 months ago
Next > < Previous

Related Solutions

Strategic Management - As an international manager for your company, you have been tasked by your...
Strategic Management - As an international manager for your company, you have been tasked by your boss with determining whether or not to expand your company’s products abroad and the possibility of manufacturing and/or outsourcing your products as well. Please apply what you have learned in this course and discuss the following: a. What factors do you think you should consider about your organization and its ability to expand abroad? b. What are the various modes of entry that you...
Capital Investment Analysis: You have been tasked by the management team of the Cotton On Group...
Capital Investment Analysis: You have been tasked by the management team of the Cotton On Group to evaluate the desirability of the development and launch of a new mobile app for Typo. Important details concerning this proposal is provided below: The cost to develop the new app will be $2.5 million. This cost will be amortised using the straight line method over the 5 year life of the app. The firm will spend $500,000 during year 1 to promote the...
Consider the following scenario: The senior systems analyst has tasked you to conduct a briefing on...
Consider the following scenario: The senior systems analyst has tasked you to conduct a briefing on the different types of firewalls. In this briefing, you must show a diagram of where on the LAN the firewalls are placed on the network. Utilize the following guidelines to create your PowerPoint presentation: One slide will consist of a LAN diagram of the location of a firewall. The other three slides should describe the types of firewalls. Utilize the Notes section of the...
You are a software development employee at a startup company. Your HR department has tasked the...
You are a software development employee at a startup company. Your HR department has tasked the IT department with developing a simple application (Windows Form Application) to load and display employee records. Your application will need to do the following: Create an Employee Class with the following properties: First Name Last Name Street Address City State Zip Create a sub class for Managers which inherits from the Employee Class. The Manager class will have the following additional properties: Cost Center...
Your company has tasked you with the evaluation of two projects for investments, Project X and...
Your company has tasked you with the evaluation of two projects for investments, Project X and Project Y. Each project has a cost of capital of R10,000 and the required return of 12 percent. The projects’ expected cash flows (in Rands) are listed below: Year Project X Project Y 0 (10,000.00) (10,000.00) 1 6,500.00 4,000.00 2 3,000.00 4,000.00 3 3,000.00 4,000.00 4 2,000.00 4,000.00 Required: 11.1. Calculate each project’s payback period, net present value (NPV and profitability index (PI). 11.2....
You have been tasked by your upper management team to give a presentation to your peers...
You have been tasked by your upper management team to give a presentation to your peers on heath disparities and inequalities. In this assignment, you will create a PowerPoint presentation to evaluate the impact of commonly accepted business principles used to create an equitable healthcare system. Your presentation should include discussion on the following topics: definitions and examples, ethical differences between an inequality and an inequity, populations involved, ways to reduce or eliminate health inequalities, and business principles and ethical...
Strategic Management - As a top manager for your firm you have been tasked with developing...
Strategic Management - As a top manager for your firm you have been tasked with developing criteria for your strategic management team to evaluate strategies for your organization. Based on what you have studied in class, what criteria would you use to conduct your analysis (i.e. in evaluating the external and internal environment and other factors). Please ground your reasoning/argument in the textbook and show me you can apply concepts from class. You may want to give an example to...
You decided that it's time to invest some money into the stock market. You bought a...
You decided that it's time to invest some money into the stock market. You bought a portfolio with the following characteristics: "Walt Disney" stock "Target" stock Price per share ($) 132 84 Number of shares purchased 10 15 The weight of Target’s stock in your portfolio is ____________ %. (Increase decimal places for any intermediate calculations, from the default 2 to 6 or higher. Only round your final answer to TWO decimal places: for example, 10.23.) A company faces a...
You have been tasked with reconfiguring the network for your company, which has grown considerably over...
You have been tasked with reconfiguring the network for your company, which has grown considerably over the past year. You have used only static routing in the past, but you do not wish to spend the administrative time required to maintain the routing tables now that the network has grown. You have recently experienced numerous inaccuracies in the routing table caused by entries you made when in a hurry. Criteria for the reconfiguration includes the following: You would like to...
You have been tasked with reconfiguring the network for your company, which has grown considerably over...
You have been tasked with reconfiguring the network for your company, which has grown considerably over the past year. You have used only static routing in the past, but you do not wish to spend the administrative time required to maintain the routing tables now that the network has grown. You have recently experienced numerous inaccuracies in the routing table caused by entries you made when in a hurry. Criteria for the reconfiguration includes the following: You would like to...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT