Answer Happy

Posted: **Wed May 18, 2022 10:04 pm**

: Stock A Has An Expected Return Of 13 With A Standard Deviation Of 13 Stock B Has An Expected Return Of 19 With A Sta 1 (30.44 KiB) Viewed 48 times

: Stock A Has An Expected Return Of 13 With A Standard Deviation Of 13 Stock B Has An Expected Return Of 19 With A Sta 2 (24.47 KiB) Viewed 48 times

: Stock A Has An Expected Return Of 13 With A Standard Deviation Of 13 Stock B Has An Expected Return Of 19 With A Sta 3 (19.83 KiB) Viewed 48 times

: Stock A Has An Expected Return Of 13 With A Standard Deviation Of 13 Stock B Has An Expected Return Of 19 With A Sta 4 (30.72 KiB) Viewed 48 times

Stock A has an expected return of 13% with a standard deviation of 13%. Stock B has an expected return of 19% with a standard deviation of 21%. The returns on the two stocks have a correlation coefficient of p = 0.5. What is the variance of a portfolio with 40% invested in stock A and the remainder in stock B? (NB: If necessary, round your answer to 3 decimal places.)
A company's dividend next year is £31 per share, and dividends are expected to grow at a rate of 3% each subsequent year. The company's expected rate of return is 16% and the risk-free rate is 2%. What is the company's current stock price? (NB: If necessary, round your answer to 2 decimal places.)
Suppose that CAPM holds, the risk-free rate is 4% and the expected return on the market portfolio is 12%. What is the beta of a stock that has an expected return of 16%? (NB: If necessary, round your answer to 3 decimal places.)
You have an initial wealth of £500. You borrow £300 at 4% annual interest, and invest the total of £800 in stock XYZ. If XYZ' stock earns a net simple return of -27% next year, what is your net simple portfolio return (after paying off the debt)? (NB: Give your answer in decimal form rounded to 3 decimal places, e.g. enter "0.123" if the portfolio return is 12.3%.)