# Finance- 17 problems- Due Friday, May 29th by 10PM (EST)

1. A portfolio is

invested 29.8% in Stock A, 10.9% in Stock B, and the remainder in Stock C. The

expected returns are 14.6%, 24.5%, and 8.8% 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.

2. 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.

3. You have observed

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

3.8%, 8.3%, 12.1%,

10.9%, 2.3%

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.

4. 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.

5. Suppose a stock

had an initial price of $70.09 per share, paid a dividend of $5 per share

during the year, and had an ending share price of $86.52. 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.

6. Suppose a stock

had an initial price of $87.89 per share, paid a dividend of $4.1 per share

during the year, and had an ending share price of $97.77. 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.

7. Suppose a stock

had an initial price of $72.88 per share, paid a dividend of $4.7 per share

during the year, and had an ending share price of $106.67. 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.

8. You have observed

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

3.9%, 8.7%, -12.8%,

13.9%, -2.7%

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.

9. You have observed

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

4.1%, 8.5%, -5.9%,

12.6%, -4.2%

What is

the geometric 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.

10. Calculate the

expected returns of your portfolio

Stock

Invest

Exp Ret

A

$137

2.4%

B

$942

17.6%

C

$313

22.7%

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.

11. Calculate the

expected returns of your portfolio

Stock

Invest

Exp Ret

A

$332

6.4%

B

$913

19.8%

C

$1,612

21.6%

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.

12. You have

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

3.8%, 8.1%, 4.8%,

10.2%, 8.9%

What is

the geometric 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.

13. 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.

14. Suppose a stock

had an initial price of $85.48 per share, paid a dividend of $6.8 per share

during the year, and had an ending share price of $94.87. If you own 48 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.

15. You own a

portfolio invested 21.65% in Stock A, 12.78% in Stock B, 13.99% in Stock C, and

the remainder in Stock D. The beta of these four stocks are 0.48, 1.2, 0.79,

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.

16. Based on the

following information, calculate the expected returns:

Prob

Return

Recession

30%

47.4%

Boom

70%

12.7%

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.

17. Suppose the

nominal rate is 10.37% and the inflation rate is 4.01%. Solve for the real

rate. Use the Fisher Effect formula.

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.