Reference no: EM13837656
1. Suppose your purchase Netflix stock (NFLX:US) which is currently trading close to $95.00. The probability of NFLX increasing to $105.00 is 35%. The probability of NFLX attaining $100.00 is 40%. There is also a 25% probability that NFLX will fall to $80.00. Determine the expected return on NFLX. In addition, determine the variance and standard deviation of NFLX, which provide some indication of the stock's riskiness or volatility.
2. Suppose you invest $158,000 and buy 2,000 shares of Microsoft (MSFT:US) at $25 per share ($50,000) and 3,000 shares of Pepsi (PEP:US) at $36 per share ($108,000). What are the portfolio weights for MSFT and PEP? If the expected returns are 12% on MSFT stock and 18% on PEP stock, which is the expected return on the investment portfolio?
3. Microsoft Excel spreadsheets are useful for computing statistics: average returns, standard deviation, variance, and coefficient of variation. Below is recent annual stock return data for ExxonMobil (XOM) and Microsoft (MSFT). Using Microsoft Excel, compute the average return, variance, standard deviation, and coefficient of variation on the returns for these stocks. As a risk adverse investor, provide a brief explanation as to which stock you would select for your investment portfolio?
|
Month
|
XOM Monthly Returns
|
MSFT Monthly Returns
|
|
November
|
5.8%
|
10.4%
|
|
October
|
0.1%
|
13.6%
|
|
September
|
7.3%
|
-10.3%
|
|
August
|
-3.3%
|
-13.8%
|
|
July
|
-4.4%
|
-9.3%
|
|
June
|
-1.6%
|
5.5%
|
|
May
|
0.7%
|
2.1%
|
|
April
|
10.7%
|
23.9%
|
|
March
|
-0.1%
|
-7.3%
|
|
February
|
-3.2%
|
-3.4%
|
|
Decrease in the risk-free rate
: If you assume beta is greater than 1, then which of these will increase the cost of equity capital according to CAPM? I. Increase in the risk-free rate; II. Decrease in the risk-free rate; III. Increase in the market rate of return; IV. Decrease in t..
|
|
Develop a quick reference section for advanced users
: Abstract- Develop an abstract summarizing the contents of the procedures manual in 150-300 words. Procedures manual quick reference- Develop a quick reference section for advanced users
|
|
In what ways can region benefit when firms within exporting
: Firms such as Vellus benefit significantly from exporting, but so do regions and countries. In what ways can a region or a country benefit when firms within them begin exporting?
|
|
Discuss the media and access and analyze the role
: You are going to discuss the case, the venue of the case (state or federal and discuss how the case may have been different had it been in the alternate court system), discuss the media and access and analyze the role that the lawyers - both the r..
|
|
Indication of the stock riskiness or volatility
: In addition, determine the variance and standard deviation of NFLX, which provide some indication of the stock's riskiness or volatility.
|
|
The sum of them is divisible by 1000
: Given that we have a1, a2, ..., a1000 show that either one of them or the sum of them is divisible by 1000.
|
|
Discuss the concept of white-collar crime
: Discuss the concept of white-collar crime. Why is it important for business persons to have an understanding of the basic principles of criminal law and white-collar crime? What is the difference between felonies and misdemeanors
|
|
Find the distance traveled by the plane in 8 hours
: A plane flies at a average speed of 300 miles per hour. The expression 300t gives the distance traveled by the plane in t hours. find the distance traveled by the plane in 8 hours.
|
|
Find a random number generator and create simulated data
: Search and identify the surveys, assessment tools or instruments you would consider to gather data on the variables identified. Explain how these surveys help you understand what your collected data should look like.
|