Observed returns for securities

Assignment Help Financial Management
Reference no: EM131556059

• Observed returns for Securities A and B in the last five years:

o A: 6%, 7%, 8%, 9%, 10%

o B: 3%, 9%, 13%, 17%, 19%

Correlation Coefficient of A an dB: + 0.5

1. Calculate the Mean for A and B

2. Calculate the Standard Deviation for A and B

3. Calculate the Sharpe Index for A and B

Reference no: EM131556059

Questions Cloud

What is the forward rate for year four : Using the data above, what is the forward rate for year 4? (for the 12 months starting at the end of year 3)
Address how corporate culture impacts strategic alliances : Find and discuss three articles that address how corporate culture impacts strategic alliances.
Judge the performance of well-diversified portfolio : Why should the Sharpe measure only be used to judge the performance of a well-diversified portfolio?
Calculate estimated cost at completion : Suppose you planned to finish a project in one year and a half. Calculate estimated cost at completion and estimated remaining cost at completion.
Observed returns for securities : Observed returns for Securities A and B in the last five years:
What were the time-weighted-dollar–weighted rates of return : what were the time-weighted (geometric) and dollar–weighted rates of return?
How many contracts should you enter : You manage a $10 million portfolio, all invested in equities; the beta for your portfolio is 0.70. How many contracts should you enter?
Forecast the firm additional funds needed : ABC is planning its operations and needs you to forecast the firm's additional funds needed (AFN).
Assume the required rate of return on the stock : What is the value of a stock that has just paid a divident of $4. Assume the required rate of return on the stock is 14%.

Reviews

Write a Review

Financial Management Questions & Answers

  Firm has just announced that because of new joint venture

Consider a firm that had been priced using an 8.5 percent growth rate and a 10.5 percent required return. The firm recently paid a $2.00 dividend. The firm has just announced that because of a new joint venture, it will likely grow at a 9.0 percent r..

  Constant growth valuation woidtke manufacturings stock

Constant Growth Valuation Woidtke Manufacturing's stock currently sells for $32.50 a share. The stock just paid a dividend of $1.04 a share (i.e., D0 = $1.04), and the dividend is expected to grow forever at a constant rate of 4.65% a year. What stoc..

  What is the aftertax cost of debt-pretax cost of debt

Jiminy’s Cricket Farm issued a bond with 25 years to maturity and a semiannual coupon rate of 6 percent 2 years ago. The bond currently sells for 92 percent of its face value. The company’s tax rate is 35 percent. What is the pretax cost of debt? Wha..

  What are the criticisms of the payback period

You have received a significant amount of information and multiple projects to evaluate to hone your skills. What are the criticisms of the payback period?

  Blue water designs is preparing a bond offering

Blue water designs is preparing a bond offering with a 7% coupon rate and a face value of $1000. The bonds will be repaid in 5 years. The company plans to issue the bonds at par value me pay interest semi annually. Given a discount rate of 6%, what s..

  What are some ways that a firm can harm

What are some ways in which a firm can improve its cash position - what are some ways that a firm can harm its cash position?

  What is the coupon rate of the bonds

Bonds issued by Fairfax Mechanical were priced at 902.26 dollars six months ago and are priced at 887.38 dollars today. What is the coupon rate of the bonds?

  Calculate the company market value cost of debt

A company's book value of equity is $200 million, and its book value cost of equity is 24%. Calculate the company's market value cost of debt.

  What is company net annual cash flow due to this loan

what is the annual cash flow from Company B to the bank? What is Company B’s net annual cash flow due to this loan?

  What is the IRR of this offer

What is the IRR of this offer? If the appropriate discount rate is 10 percent, should you accept this offer?

  Weighted-average cost of capital at new capital structure

What will be the company’s weighted-average cost of capital at the new capital structure?

  Merger valuation

Harrison Corporation is interested in acquiring Van Buren Corporation. Assume that the risk-free rate of interest is 3% and the market risk premium is 7%. Harrison estimates that if it acquires Van Buren, the year-end dividend will remain at $2.05 a ..

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!

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