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##### 1) Calculate the expected returns of your portfoli...

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Solution

**Question**

1) Calculate the expected returns of your portfolio Stock Invest Exp Ret A $427 8% B $633 14.5% C $1,595 25.2% Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 12.345% then enter as 12.35 in the answer box. 2) Suppose the returns for Stock A for last six years was 4%, 7%, 8%, -2%, 9%, and 7%. Compute the standard deviation of the returns. 3) Suppose the nominal rate is 14.62% and the inflation rate is 5.49%. Solve for the real rate. 4) You own a portfolio invested 16.14% in Stock A, 13.99% in Stock B, 15.87% in Stock C, and the remainder in Stock D. The beta of these four stocks are 1.36, 0.58, 0.95, and 0.99. What is the portfolio beta? 5) Based on the following information, calculate the expected returns: 1. Prob Return Recession 30% 13.8% Boom 70% 18.8% Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 12.345% then enter as 12.35 in the answer box. 6) Suppose a stock had an initial price of $97.87 per share, paid a dividend of $3.1 per share during the year, and had an ending share price of $93.75. What are the percentage returns? 7) A portfolio is invested 37.7% in Stock A, 26.6% in Stock B, and the remainder in Stock C. The expected returns are 19%, 26.1%, and 11.8% respectively. What is the portfolio's expected returns? 8) Suppose a stock had an initial price of $83.94 per share, paid a dividend of $5.2 per share during the year, and had an ending share price of $98.63. What are the dollar returns? 9) You have observed the following returns on ABC's stocks over the last five years: 3.8%, 9.9%, 10.1%, 11.9%, 3.2% What is the geometric average returns on the stock over this five-year period. 10) Calculate the expected returns of your portfolio Stock Invest Exp Ret A $495 4.3% B $925 17.1% C $374 25.5% Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 12.345% then enter as 12.35 in the answer box. 11. Suppose a stock had an initial price of $89.77 per share, paid a dividend of $9.3 per share during the year, and had an ending share price of $80.25. What are the percentage returns if you own 25 shares? 12. Suppose the real rate is 2.65% and the nominal rate is 14.3%. Solve for the inflation rate. 13. Suppose the real rate is 5.88% and the inflation rate is 7%. Solve for the nominal rate. 14. You have observed the following returns on ABC's stocks over the last five years: 4.7%, 8.9%, -8.6%, 12.3%, -2.9% What is the arithmetic average returns on the stock over this five-year period. 15. Suppose a stock had an initial price of $94.23 per share, paid a dividend of $4.8 per share during the year, and had an ending share price of $82.22. If you own 142 shares, what are the dollar returns? 16. You own a portfolio invested 27.03% in Stock A, 16.48% in Stock B, 14.48% in Stock C, and the remainder in Stock D. The beta of these four stocks are 0.76, 1.08, 0.66, and 1.1. What is the portfolio beta? 17. You have observed the following returns on ABC's stocks over the last five years: 4.9%, 9.5%, -9.3%, 10%, -9.6% What is the geometric average returns on the stock over this five-year period. 18. You have observed the following returns on ABC's stocks over the last five years: 4.9%, 9.5%, -9.3%, 10%, -9.6% What is the geometric average returns on the stock over this five-year period. 19. Suppose a stock had an initial price of $65.3 per share, paid a dividend of $4 per share during the year, and had an ending share price of $107.67. What are the percentage returns?

Paper#7081 | Written in 18-Jul-2015

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