User Account

All Pages

Higher risk-adjusted returns

Assignment Help Finance Basics
Reference no: EM131173341

Assume the following information over a five-year period.

  • Average risk0free rate = 6%
  • Average return for Crane Stock = 11%
  • Average return for Load Stock = 14%
  • Standard Deviation Crane Stock Returns = 2%
  • Standard Deviation Load Stock Returns = 4%
  • Beta of Crane Stock = 0.8
  • Beta of Load Stock = 1.1

Determine which stock has higher risk-adjusted returns according to the Sharpe Index. Which stock has the higher risk-adjusted returns according to the Treynor Index?

Reference no: EM131173341

Questions Cloud

Evaluate three communication strategies : Interpret the potential causes of resistance in the organization. Identify and describe three (3) potential causes of resistance to your change plan. Identify and describe three (3) potential sources of resistance to your change plan.
Monopolistic competition and monopoly : Risk-averse persons sometimes prefer to play some gambles even if they know that those gambles are not fair, i.e., on average people lose by playing them.  Which of the following is true for perfect competition but not true for monopolistic competiti..
Pay for the company stock : Micro, Inc. will pay a dividend of $2.30 per share next year. Ifthe company plans to increase its dividend by 9 percent per year indefinitely, and you require a 12percent return on your investment, what should you pay for the company's stock?
In what way will the target behavior be assessed : In what way will the target behavior be assessed? Provide details on a method to document the targeted behaviors. Test the assessment out in your practicum placement.
Higher risk-adjusted returns : Determine which stock has higher risk-adjusted returns according to the Sharpe Index. Which stock has the higher risk-adjusted returns according to the Treynor Index?
Speculating with currency put options : Alice Duever purchased a put option on British pounds for $0.04 per unit. The strike price was $1.80 and the spot rate at the time the pound option was exercised was $1.59. Assume there are 31,250 units in a Britissh pound option. What was Alice's..
Explain what are at least five key points in the articles : What are at least five key points in the articles and the text readings? Based upon your experience in education, how might you apply this content to a classroom and instruction?
What is the bonds valuation : Bond 1 has a coupon rate of 0.0400, a face value of $10,000, for 20 years, pays dividends on a semi-annual basis, and a required yield (YTM) of 0.0350. What is the bonds valuation?
When can transition planning begin for students with needs : When can transition planning begin for students with special needs? How do transition services for students with learning disabilities differ from those with intellectual or severe disabilities?

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the current yield on a bond

What is the current yield on a bond that has the following characteristics: (a) Price: $890.00, (b) Coupon: $75.00, and (c) Number of years until maturity: 10?

  A reconstruction project in post-war iraq

A U.S. company has been asked to bid for a reconstruction project in post-war Iraq. Since its major foreign competitors are barred from bidding for Iraqi contracts by the US, the firm is pretty confident that it'll win the contract. It expects to rec..

  Could an investor beat the stock market and generate a

could an investor beat the stock market and generate a superior return with companies that have formulated and

  A bank could set a cap and a floor on the interest rate it

A bank could set a cap and a floor on the interest rate it receives from a commercial loan by:

  Significant changes in international taxation

Predict what you believe will be the most significant changes in international taxation you will likely see in the next few years. Explain your reasoning.

  If the suitable interest rate is 511 percent determine the

trigen corp. management will invest cash flows of 505197 636969 592910 818400 1239644 and 1617848 in research and

  Define a horizontal merger

List one benefit of trading halts for publicly listed companies as a way of managing information made available to the public, and list two disadvantages of trading halts.

  Research this company and its industry and develop

Research this company and its industry and develop your estimate(s) of the value of the company's stock. You will use your beta estimate and apply the major method: Free Cash Flow You will compare the estimate you get from this method with each other..

  Types of financial markets and orders and trading

in a paper provide an evaluation of the followingtypes of financial markets and orders and trading mechanisms in which

  Lottery-annuity or lump sum

Assume you won the lottery for $7M. You have the following two choices in how you want to receive your prize: Which is the better option?

  What is the capital structure weight of the firm

The tax rate is 34 percent. What is the capital structure weight of the firm's common stock?

  A financial analyst at buckco ltd wants to compute the

a financial analyst at buckco ltd. wants to compute the companys weighted average cost of capital wacc using the

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd