Finance: Calculate the expected returns of your portfolio

Finance: Calculate the expected returns of your portfolio

Subject: Business    / Finance
Question

Calculate the expected returns of your portfolio

Stock    Invest    Exp Ret
A

$358
8.1%
B    $954    18.1%
C    $1,383    26%

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.

1 points

QUESTION 2

Suppose a stock had an initial price of $64.29 per share, paid a dividend of $5 per share during the year, and had an ending share price of $94.19. What are the dollar returns?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 3

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.

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 0.12345 then enter as 12.35 in the answer box.

1 points

QUESTION 4

You own a portfolio invested 19.2% in Stock A, 19.27% in Stock B, 28.6% in Stock C, and the remainder in Stock D. The beta of these four stocks are 0.82, 0.69, 0.94, and 0.91. What is the portfolio beta?

Note: Enter your answer rounded off to two decimal points. For example, if your answer is 12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 5

Suppose a stock had an initial price of $66.22 per share, paid a dividend of $4.3 per share during the year, and had an ending share price of $84.92. What are the percentage returns?

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 0.12345 then enter as 12.35 in the answer box.

1 points

QUESTION 6

Calculate the expected returns of your portfolio

Stock    Invest    Exp Ret
A

$427
3.6%
B    $921    16.7%
C    $330    28.7%

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.

1 points

QUESTION 7

You own a portfolio invested 26.47% in Stock A, 18.59% in Stock B, 22.2% in Stock C, and the remainder in Stock D. The beta of these four stocks are 1.35, 1.33, 0.29, and 1.26. What is the portfolio beta?

Note: Enter your answer rounded off to two decimal points. For example, if your answer is 12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 8

Suppose a stock had an initial price of $96.73 per share, paid a dividend of $7.3 per share during the year, and had an ending share price of $103.32. What are the percentage returns if you own 25 shares?

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 0.12345 then enter as 12.35 in the answer box.

1 points

QUESTION 9

A portfolio is invested 23.1% in Stock A, 20.1% in Stock B, and the remainder in Stock C. The expected returns are 15.3%, 24%, and 21.7% respectively. What is the portfolio’s expected returns?

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.

1 points

QUESTION 10

Based on the following information, calculate the expected returns:

Prob    Return
Recession    30%    36.4%
Boom    70%    9.8%

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.

1 points

QUESTION 11

Suppose a stock had an initial price of $60.63 per share, paid a dividend of $4.6 per share during the year, and had an ending share price of $97.82. What are the percentage returns?

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 0.12345 then enter as 12.35 in the answer box.

1 points

QUESTION 12

Suppose a stock had an initial price of $75.53 per share, paid a dividend of $8 per share during the year, and had an ending share price of $80.82. If you own 277 shares, what are the dollar returns?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 13

You have observed the following returns on ABC’s stocks over the last five years:

4.1%, 9%, -7%, 11%, -6.7%

What is the arithmetic average returns on the stock over this five-year period.

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 0.12345 then enter as 12.35 in the answer box.

1 points

QUESTION 14

Portfolio diversification eliminates which one of the following?

Total investment risk

Portfolio risk premium

Market risk

Unsystematic risk

Reward for bearing risk

1 points

QUESTION 15

A $36,000 portfolio is invested in a risk-free security and two stocks. The beta of stock A is 1.29 while the beta of stock B is 0.90. One-half of the portfolio is invested in the risk-free security. How much is invested in stock A if the beta of the portfolio is 0.58?
$6,000
$9,000
$12,000
$15,000
$18,000

1 points

QUESTION 16

What is the beta of the following portfolio?
1.08
1.14
1.17
1.21
1.23

1 points

QUESTION 17

The systematic risk is same as:

Unique risk

Diversifiable risk

Asset-specific risk

Market risk

Unsystematic risk

1 points

QUESTION 18

You own a portfolio that has $1,900 invested in Stock A and $2,700 invested in Stock B. If the expected returns on these stocks are 9 percent and 15 percent, respectively, what is the expected return on the portfolio?

10.57 percent

11.14 percent

11.96 percent

12.52 percent

13.07 percent

1 points

QUESTION 19

The stock of Billingsley United has a beta of 0.92. The market risk premium is 8.4 percent and the risk-free rate is 3.2 percent. What is the expected return on this stock?
8.87 percent
9.69 percent
10.93 percent
11.52 percent
12.01 percent

1 points

QUESTION 20

What is the beta of the following portfolio?
0.98
1.02
1.11
1.14
1.20

1 points

QUESTION 21

Standard deviation measures _____ risk while beta measures _____ risk.

systematic; unsystematic

unsystematic; systematic

total; unsystematic

total; systematic

asset-specific; market

1 points

QUESTION 22

You own a portfolio of two stocks, A and B. Stock A is valued at $6,540 and has an expected return of 11.2 percent. Stock B has an expected return of 8.1 percent. What is the expected return on the portfolio if the portfolio value is $9,500?
9.58 percent
9.62 percent
9.74 percent
9.97 percent
10.23 percent

1 points

QUESTION 23

If markets are efficient, the difference between the instrinsic value and the market value of the comapny’s security is:

zero

positive

negative

1 points

QUESTION 24

Semi-strong-form efficient markets are not weak-form efficient.

True

False

1 points

QUESTION 25

Suppose the real rate is 3.33% and the nominal rate is 8.28%. Solve for the inflation rate. Use the Fisher Effect equation.

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 0.12345 then enter as 12.35 in the answer box.

1 points