Question
The annual returns of Mac Corp. and the Market portfolio over the last ten years were...
The annual returns of Mac Corp. and the Market portfolio over the last ten years were as follows:
|
Year |
Returns (%) on MAC Corp. |
Returns (%) on Market Portfolio |
|
1 |
13 |
-7 |
|
2 |
8 |
2 |
|
3 |
22 |
2 |
|
4 |
18 |
-10 |
|
5 |
15 |
7 |
|
6 |
-13 |
13 |
|
7 |
23 |
8 |
|
8 |
28 |
20 |
|
9 |
-8 |
15 |
|
10 |
2 |
3 |
|
11 |
10 |
9 |
|
12 |
12 |
8 |
|
13 |
5 |
3 |
|
14 |
-3 |
-5 |
|
15 |
8 |
7 |
Find the following for Mac Corp:
a) Standard Deviation of Mac Corp. and the Market Portfolio (Do not use the excel standard deviation function. Show all your work)
b) Covariance between the Mac Corp and the Market portfolio (You can use the Covariance function in excel)
c) Correlation between the Mac Corp and the Market portfolio (Use the covariance and standard deviations to calculate the correlation)
d) Calculate the Beta of Mac Corp.
e) Calculate the market risk and firm-specific risk for Mac Corp.
Homework Answers
Answer #1
Not the answer you're looking for?
Similar Questions
Deep Value, Inc.’s annual stock returns for the last ten years are: –5%, 15%, 11%, 18%,...
Deep Value, Inc.’s annual stock returns for the last ten years
are: –5%, 15%, 11%, 18%, –8%, 9%, 16%, –3%, 3%, and 35%. The Market
Index’s annual returns for the same ten years are: 10%, 22%, 9%,
13%, –7%, 8%, 15%, –13%, –12%, and 18%. What is Deep Value’s beta
coefficient? Enter your answer rounded to two decimal places. For
example, if your answer is 12.345 then enter as 12.35 in the answer
box.
5) A portfolio that combines the risk free asset and the market portfolio has an expected...
5)
A portfolio that combines the risk free asset and the market
portfolio has an expected return of 7% and a standard deviation of
10%. The risk free rate is 4%, and the market returns (expected) is
12%. What expected return would a security earn if it had a
correlation of 0.45 ewth the market portfolio and a standard
deviation of 55%.?
Suppose the risk free rate is 4.8% and the market portfolio has
an expected return of 11.4%. the...
he W Equity portfolio has a standard deviation of returns of 8. The R Bond portfolio...
he W Equity portfolio has a standard deviation of returns of 8.
The R Bond portfolio has a standard deviation of returns of 6. If
the Covariance of these portfolio is 5 what is this portfolio's
coefficient of correlation?
A mutual fund has earned an annual average return of 15% over the last 5 years....
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 45% for the mutual fund and
22% for the market. What was the fund’s CAPM alpha?
A mutual fund has earned an annual average return of 15% over the last 5 years....
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 45% for the mutual fund and
22% for the market. What was the fund’s CAPM alpha?
A mutual fund has earned an annual average return of 15% over the last 5 years....
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?
Suppose the annual returns for North Airline are 12%, 20%, 5%, -5%, -2%, 7% and for...
Suppose the annual returns for North Airline are 12%, 20%, 5%,
-5%, -2%, 7% and for South Airline are 8%, -5%, -2%, 7%, 5%, 24%.
The volatility of returns for South Airline is? The Standard
Deviation of returns for North Airline is?The Covariance of returns
between North & South Airlines is?The Correlation Coefficient
of returns between North & South Airlines is?The mean return
for North Airline is?
You are given the following information concerning a stock and the market: Returns Year Market Stock...
You are given the following information concerning a stock and
the market:
Returns
Year
Market
Stock
2011
10
%
25
%
2012
10
10
2013
21
5
2014
−15
−30
2015
37
16
2016
15
17
a. Calculate the average return and standard
deviation for the market and the stock. (Use Excel to
complete the problem. Do not round intermediate calculations. Enter
your answers as a percent rounded to 2 decimal
places.)
Market
Stock
Average Return
Standard Deviation
b. Calculate...
First and Ten Corporation’s stock returns have a covariance with the market portfolio of .0456. The...
First and Ten Corporation’s stock returns have a covariance with
the market portfolio of .0456. The standard deviation of the
returns on the market portfolio is 19 percent and the expected
market risk premium is 7.1 percent. The company has bonds
outstanding with a total market value of $55.8 million and a yield
to maturity of 6 percent. The company also has 5 million shares of
common stock outstanding, each selling for $43. The company’s CEO
considers the firm’s current...
A market consists of four risky assets with the following characteristics: Asset 1: Mean return =...
A market consists of four risky assets with the following
characteristics: Asset 1: Mean return = 5, Risk (i.e, Standard
Deviation) = 10 Asset 2: Mean return = 10, Risk = 20 Asset 3: Mean
return = 15, Risk = 30 Asset 4: Mean return = 20, Risk = 40 The
returns of Asset 1 have 20% correlation with returns of all the
other assets. The returns of Asset 2 have 10% correlation with
returns of Asset 3 and Asset...
ADVERTISEMENT
Need Online Homework Help?
Get Answers For Free
Most questions answered within 1 hours.
ADVERTISEMENT
Active Questions
asked 17 minutes ago
asked 32 minutes ago
asked 42 minutes ago
asked 50 minutes ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago