QUESTION 8 Given Investment E(R) σ Stock A $15,000 10% 10% Stock B $5,000 5% 25% Total $20,000 and Corr(AB)=PAB = -0.25. Find the Portfolio Standard Deviation 8.1779% 5.876 8.6779% 6.557% 8.4779%

Intro You've assembled the following portfolio: Stock Exp. return Investment 1 6.9% 2 14.7% 3 16.3% Part 1 What is the expected return of the portfolio? 3+ decimals Submit $5,000 $12,000 $7,000

Excel Online Structured Activity: CAPM, portfolio risk, and return Consider the following information for three stocks, Stocks A, B, and C. The returns on the three stocks are positively correlated, but they are not perfectly correlated. (That is, each of the correlation coefficients is between 0 and 1.) Stock Expected Return Standard Deviation Beta 9.22 % A 16 % 0.8 11.08 16 1.2 C 12.94 16 1.6 Fund P has one-third of its funds invested in each of the three stocks. The risk-free rate is 5.5%, and the market is in equilibrium. (That is, required returns equal expected returns.) The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet a. What is the market risk premium (rM-rRE)? Round your answer to two decimal places b. What is the beta of Fund P? Do not round intermediate calculations. Round your answer to two decimal places c. What is the required return of Fund P? Do…

QUESTION 7 1. Determine the volatility for the following three stock portfolio Asset A Allocation 30% 45% 25% Expected return 8.6% 9.5% 12.7% Expected 25% 32% 42% standard deviation Correlation B A 1.00 0.84 0.72 0.84 1.00 0.96 0.72 0.96 1.00 31.62% 9.59% 30.97% O 32.74%

Day 5/4/2020 5/5/2020 5/6/2020 5/7/2020 5/8/2020 LMT HPR 345.82 321.56 -7.015% 337.21 4.867% 341.11 1.157% 355.32 4.166% S/9/2020 362.31 1.967% 12. What is WEC stock Total Geometric Return based on the table above? A. 1.028% В. 3.249% C. 4.768% D. 5.141% E. 10.476%

АВ С 8% 13% 5% Asset Return Standard Deviation12%20%0% Cov(A,B) There are two types of investors in the market. Investor X: has a Risk aversion level of 0.5 Investor Y: has a Risk aversion level of 4.5 For both investors find the respective weights of assets in (1) optimal risky portfolio and the (2) optimal complete portfolio given the following market situations: Lending is allowed at risk-free rate and rowing is allowed at 7% 72

D Question 6 A portfolio consists of three stocks A, B, and C. $4,700 is invested in Stock A, $4,000 in B, and $9,500 in C. Stock A has a Beta of 1.71, B has 1.33, and C has 0.84. What is the beta of the total portfolio? 1.04 1.17 1.07 1.33 1.01

Measuring Risk Investment Expected Standard Return Deviation Treasury Bill 5% 0% Common Stock 15% 12.85% • So we observe that the publishing company stock offers a higher expected return but also entails more risk as measured by standard deviation. An investor's choice of a specific investment will be determined by their attitude toward risk.

Covariance with Mean Return Stock AOL Microsoft Intel AOL .002 .001 15% Microsoft .001 .002 .001 12 Intel 001 .002 10 5.2. Compute the tangency portfolio weights assuming a risk-free asset yields 5 percent.

QUESTION ONE Table 1 Closing Gross MCAP Index Statistic Dividend FTSE Free Portfolio Instrument Net MCAP Weight Code Date Yield SI Price Float Factor J100 2019/01/31 Accentuate 8,08% 420 R7,95 R 3 345 996 88% 1,00000 R2 944 0,07% 880 716 477 110 090 J100 2019/02/28 Accentuate 7,22% 420 R7,61 R 3 202 897 88% 1,00000 R2 818 0,06% 880 485 549 787 090 J100 2019/03/31 Accentuate 6,22% 420 R7,60 R 3 198 688 88% 1,00000 R2 814 0,06% 880 684 846 042 090 J100 2019/04/30 Accentuate 9,95% 420 R8,63 R3 632 195 88% 1,00000 R 3 196 0,07% 880 177 331 755 090 J100 2019/05/30 Accentuate 8,85% 420 R 8,95 R3 766 876 88% 1,00000 R3 314 0,07% 880 806 851 589 090 J100 2019/06/30 Accentuate 9,98% 420 R 8,55 R 3 598 524 88% 1,00000 R 3 166 0,06% 880 770 701 797 090 J100 2019/07/31 Accentuate 9,31% 420 R7,70 R 3 240 902 88% 1,00000 R2 851 0,06% 880 957 994 602 090 J100 2019/08/29 Accentuate 3,18% 420 R8,01 R3 371 249 88% 1,00000 R2 966 0,06% 880 521 699 578 090 J100 2019/09/30 Accentuate 5,14% 420 R 8,27 R 3…