Reference no: EM132460065

Q1

Ahmad purchase a share for $.200 and maintain it for the next 5 years and receive a dividend of $.20 at the end of each years and finally sell it for $.300. Calculate his return and rate of return.

Q2

If return from an investment are 20%, 40%, 60%, 35% and 40% with the probabilities of 30%, 20%, 10%, 20% and 10% respectively. Calculate expected return, standard deviation and coefficient of deviation.

Q3

The closing price for a stock are as following, calculate expected return, standard deviation and coefficient of deviation.

Closing price:

13500, 13000, 12500, 12000, 11500, 11000, 11800, 11500, 12000, 11700, 12200, 12000.

Q4

From the following information calculate expected return of a portfolio.

Total capital is $.400000 which is invested 40% in security A with return of 20%, 30% in security B with return of 30%, 20% in security C with return of 25% and 10% in D security with return of 15%.

Q5

From the following information calculate covariance and coefficient of correlation.

Period                  return                  expected return

Period 1

               A            10                          12

               B            12                          13

Period 2

               A            15                          12

               B            16                          10

Period 3

               A            20                          15

               B            30                          20

Standard deviation for A and B securities are as 5 and 6 respectively.

Q6

Mr. Rahim invests in two different securities such as A and B at the ratio of 30:70 respectively.

If standard deviation of A and B are 20% and 25% respectively and coefficient of correlation is 0.4. Find out their standard deviation.