FIN300 F2021 D2L Quiz 5 answers PDF

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FIN300 Fall 2021 (Chapters 10 and 11) Quiz 5 1) Suppose you invested $7.55 in Firm AAA one month ago. Today, it paid a dividend of $0.10, and then you sold it for $8.85. What was the return in percentage on your investment over the month? (Provide the numeric answer to 2 decimal places. For example, if your answer is 0.9458%, please type 0.95.) 18.54 (8.85+0.10-7.55)/7.55=18.54% 2) Firm BBB had a realized return of 18%, 4%, -12%, and -6% over four successive quarters. What is your annual realized return in percentage if you bought the stock at the beginning of the year and sold it at the end of the year? (Provide the numeric answer to 2 decimal places. For example, if your answer is 0.9458%, please type 0.95.) 1.51 (1+18%)x(1+4%)x(1-12%)x(1-6%)-1=1.51% 3) Firm CCC delivered a return of 14.48%, 24.13%, 17.26% and 9.83% over four successive years. What is the arithmetic average annual return per year in percentage? (Provide the numeric answer to 2 decimal places. For example, if your answer is 0.9458%, please type 0.95.) 16.43 (14.48%+24.13%+17.26%+9.83%)/4=16.43% 4) Firm DDD delivered annual returns of 10.55%, -8.32%, 21.08% and 9.10% from 2017 to 2020. What is the average compound annual return per year in percentage? (Provide the numeric answer to 2 decimal places. For example, if your answer is 0.9458%, please type 0.95.) 7.57 [(1+10.55%)x(1-8.32%)x(1+21.08%)x(1+9.10%)]^(1/4)-1=7.57% 5) Your investment portfolio contains 80% of Firm EEE and 20% of Firm FFF. If you expect the return on EEE to be 6% in the next year, and the return on FFF to be 13%, what is the expected return for your portfolio in percentage? (Provide the numeric answer to 2 decimal places. For example, if your answer is 0.9458%, please type 0.95.) 7.40 80%x6%+20%x13%=7.40% 6) Suppose your portfolio includes 200 shares of Firm GGG at $50 per share, 200 shares of Firm HHH at $30 per share, and 100 shares of Firm III at $40 per share. What is the weight of Firm GGG in your portfolio in percentage? (Provide the numeric answer to 2 decimal places. For example, if your answer is 0.9458%, please type 0.95.) 50.00 200x50/(200x50+200x30+100x40) =50.00% 7) Your portfolio has 20% of its value invested in Firm III and the remainder invested in Firm JJJ. Firm III stock has a standard deviation of 15%, while Firm JJJ stock has a standard deviation of 12%. If the correlation between the two firms is 0, what is the standard deviation of your portfolio

FIN300 Fall 2021 (Chapters 10 and 11) in percentage? (Provide the numeric answer to 2 decimal places. For example, if your answer is 0.9458%, please type 0.95.) 10.06 Var = (0.2)^2 × (0.15)^2 + (0.8)^2 × (0.12)^2 + 2 × 0.2 × 0.8 × 0.15 × 0.12 × 0 =0.010116; standard deviation = 0.010116^(1/2) = 10.06%.

8) Firm KKK has a beta of 1.2. If the risk-free rate is 1.8%, and the market risk premium is 6.5%, what is the expected return of KKK stock in percentage, according to the CAPM? (Provide the numeric answer to 2 decimal places. For example, if your answer is 0.9458%, please type 0.95.) 9.60 1.8% + 1.2(6.5%) = 9.60%...