Question

2. The table below shows a portfolio of stocks. Using the information on the table, perform...

2. The table below shows a portfolio of stocks. Using the information on the table, perform the following tasks. (30 points)

1. Stock

2.

Total Value

3.

Weight

Stock Return

Recession

(60%)

Normal

(40%)

MRK

$ 4,600

15%

10%

VZ

$ 4,400

1%

15%

AAPL

$ 7,500

8%

18%

CAT

$ 2,500

-2%

5%

FDX

$ 1,000

3%

12%

Complete column 3 using the total value to compute the weights.

Calculate the overall expected return of the portfolio assuming that the probability of a recession is equal to 60%.

Calculate the standard deviation of the portfolio.

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The table below shows a portfolio of stocks. 1. Stock 2. Total Value 3. Weight Stock...
The table below shows a portfolio of stocks. 1. Stock 2. Total Value 3. Weight Stock Return Recession (60%) Normal (40%) MRK $ 4,600 15% 10% VZ $ 4,400 1% 15% AAPL $ 7,500 8% 18% CAT $ 2,500 -2% 5% FDX $ 1,000 3% 12% Using the information on the table, perform the following tasks. (30 points) 1. Stock 2. Total Value 3. Weight Stock Return Recession (60%) Normal (40%) MRK $ 4,600 15% 10% VZ $ 4,400 1%...
Total Value Weight Stock Return Recession (50%) Normal (30%) $ 4,600 23% 15% 10% $ 4,400...
Total Value Weight Stock Return Recession (50%) Normal (30%) $ 4,600 23% 15% 10% $ 4,400 22% 1% 15% $ 7,500 37.5% 8% 18% $ 2,500 12.5% -2% 5%     $ 1,000 5% 3% 12% Calculate the overall expected return of the portfolio assuming that the probability of a recession is equal to 50%. Calculate the standard deviation of the portfolio.
The table below shows the expected rates of return for three stocks and their weights in...
The table below shows the expected rates of return for three stocks and their weights in some portfolio: Stock A Stock B Stock C Portfolio weights 0.3 0.2 0.5 State Probability Expected returns Recession 0.2 0.08 0.03 0.14 Boom 0.8 0.13 0.05 0.15 1. What is the portfolio return during a recession? 2. What is the expected portfolio return? 3. What is the standard deviation of the portfolio returns?
Expected return and standard deviation for stocks A and B are shown in the table below....
Expected return and standard deviation for stocks A and B are shown in the table below. State of Economy Probability of state of the economy Rate of return if state occurs Stock A Stock B Recession .2 -.10 .15 Normal .5 .20 .22 Boom .3 .60 .29 Expected return .26 .227 Standard Deviation .25 .05 1. Refer to the information in the table above. Suppose you have $50,000 total. If you put $30,000 in Stock A and $20,000 in Stock...
James is building a 3-stock portfolio. The weights and returns of the stocks are below. The...
James is building a 3-stock portfolio. The weights and returns of the stocks are below. The Risk-Free Rate is 3%. What is the Expected Return of this portfolio? Weight A = 60%; Weight B = 25%; Weight C = 15%; Return A = 15%; Return B = -3%; Return C = 2.9%. 1. 7.50% 2. 8.70% 3. 11.70% 4. 17.90%
Using the data in the following table, answer questions. Year Stock X Stock Y 2012 -11%...
Using the data in the following table, answer questions. Year Stock X Stock Y 2012 -11% -5% 2013 15% 25% 2014 10% 15% 2015 -5% -15% 2016 5% -5% 2017 8% -2% 2018 7% 10% 2019 5% 15% Average return Standard deviation Correlation between Stock X and Stock Y 0.7567 1.Calculate the standard deviation of returns for Stocks X and Y. 2.For a portfolio that is 75% weighted in Stock X, and 25% weighted in Stock Y, calculate the expected...
A portfolio consists of Stock Aand Stock B. Data for the 2 stocks is shown below...
A portfolio consists of Stock Aand Stock B. Data for the 2 stocks is shown below Stock A: expected return 12% Stock A: standard deviation 40% Stock B: expected return 14% Stock B: standard deviation 60% Correlation between A and B 0.35 Stock A beta             0.90 Stock B beta             1.20 % portfolio in Stock A 45% % portfolio in Stock B 55% A Calculate the expected return of the portfolio portfolio : expected return B Calculate the standard...
Given the information in the table below, an equally weighted portfolio of stocks A, B, and...
Given the information in the table below, an equally weighted portfolio of stocks A, B, and C has a standard deviation equal to 7%   Stock Expected Return Standard Deviation Correlation with A Correlation with B Correlation with C A 10% 7% 1 B 10% 7% 0 1 C 10% 7% 0 0 1 Statement: An equally weighted portfolio of stocks A, B, and C has a standard deviation equal to 7%. (True or False ? Explain if True or False)
A portfolio consists of Stock A and Stock B. Data for the 2 stocks is shown...
A portfolio consists of Stock A and Stock B. Data for the 2 stocks is shown below Stock A: expected return 12% Stock A: standard deviation 40% Stock B: expected return 14% Stock B: standard deviation 60% Correlation between A and B 0.35 Stock A beta             0.90 Stock B beta             1.20 % portfolio in Stock A 45% % portfolio in Stock B 55% A Calculate the expected return of the portfolio portfolio : expected return B Calculate the...
1. The following table shows rates of return for two stocks. A B C 1 Year...
1. The following table shows rates of return for two stocks. A B C 1 Year Stock A Stock B 2 1 14% 13% 3 2 -15% -14% 4 3 -6% -9% 5 4 5% 28% 6 5 14% 8% 7 6 15% 7% a. What is the arithmetic average return for stock B? b. What is the variance for stock B? c. What is the covariance of returns? 2. The following table shows realized rates of return for two...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT