The table below gives the amount invested and betas for three stocks.

Stock      Amount Invested          Beta

GM            K10, 000                      1.2

IBM           K10, 000                      1.0

WMT        K20, 000                      0.7

REQUIRED:

1. Using the CAPM, if the expected return for the market is 6% and the risk-free rate is 1.5%, what is the expected return for each stock?   
2. What is the beta for this portfolio based on the invested amounts?
3. Using the CAPM, what is the expected return for this portfolio?       

A manufacturer of college textbooks is interested in estimating the strength of the bindings produced by a particular binding machine. Strength can be measured by recording the force required to pull the pages from the binding. If this force is measured in pounds, how many books should be tested to estimate with 99% confidence to within 0.1 lb, the average force required to break the binding? Assume that σ is known to be 0.7 lb. (Use the value of z rounded to two decimal places.)

An engineer designed a valve that will regulate water pressure on an automobile engine. The engineer designed the valve such that it would produce a mean pressure of 4.7 pounds/square inch. It is believed that the valve performs above the specifications. The valve was tested on 24 engines and the mean pressure was 5.0 pounds/square inch with a standard deviation of 0.7. A level of significance of 0.01 will be used. Assume the population distribution is approximately normal. Make the decision to reject or fail to reject the null hypothesis.

12. A mutual fund has earned an annual average return of 15% over the last 5 years. During that time, the average risk-free rate was 2% and the average market return was 12% per year. The correlation coefficient between the mutual fund’s and market’s returns was 0.7. The standard deviation of returns was 30% for the mutual fund and 22% for the market. What was the fund’s CAPM alpha?

Stuck on this. Any help would be greatly appreciated.

Use the values provided to complete the questions below.

a. What values are out of range?

b. Are they high or low?

c. Which abnormal value concerns you the most?

d. What nursing assessments must you perform because of this?

e. What priority nursing intervention would you anticipate? Why?

You are about to calculate the value of a call option on shares. You have the following information. The share price is 49 SEK, The exercise price is 50 SEK.

The risk free interest rate is 3% and the time to maturity is 3 month.

d1=0.7 and d2=0.5.

a. What is N(d1) and N(d2)? (2p)

b. What is the value of the call option? (6p)

c. With the same information. What is the value of the put option? (4p)

Consider the following hypothesis test:

H0: p ≥ 0.75

Ha: p < 0.75

A sample of 300 items was selected. Compute the p-value and state your conclusion for each of the following sample results. Use α = .05.

Round your answers to four decimal places.

a. p = 0.67   p-value _____?

b. p = 0.75 p-value _____?

c. p = 0.7 p-value _____?

d. p = 0.77 p-value _____?

In a random sample of 19 residents of the state of Montana, the mean waste recycled per person per day was 1.4 pounds with a standard deviation of 0.7 pounds. Determine the 90% confidence interval for the mean waste recycled per person per day for the population of Montana. Assume the population is approximately normal. Step 1 of 2 : Find the critical value that should be used in constructing the confidence interval. Round your answer to three decimal places.