Calculate the expected returns of your portfolio

| June 10, 2016

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.

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