Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Assume a market index represents the common factor and all stocks in the economy have a beta of 1. Firm-specific returns all have a standard deviation of 36%.
Suppose an analyst studies 20 stocks and finds that one-half have an alpha of 3.2%, and one-half have an alpha of –3.2%. The analyst then buys $1.6 million of an equally weighted portfolio of the positive-alpha stocks and sells short $1.6 million of an equally weighted portfolio of the negative-alpha stocks.
a. What is the expected return (in dollars), and what is the standard deviation of the analyst’s profit? (Enter your answers in dollars not in millions. Do not round intermediate calculations.Round your answers to the nearest dollar amount.)
Expected Return $
Standard Deviation $
b-1. How does your answer change if the analyst examines 50 stocks instead of 20? (Enter your answer in dollars not in millions.Do not round intermediate calculations. Round your answer to the nearest dollar amount.)
b-2. How does your answer change if the analyst examines 100 stocks instead of 20? (Enter your answer in dollars not in millions.)
Simpkins Corporation does not pay any dividends because it is expanding rapidly and needs to retain all of its earnings. However, investors expect Simpkins to begin paying dividends, with the first dividend of $0.60 coming 4 years from today.
The normal rate return on large company stocks consists of a:
Day's sales in receivables: A company has net income of $186,000, a profit margin of 7.9 percent , and accounts receivable balance of $123840. Assuming 70 percent of sales are not credit, what is the company's days' sales in receivable?
Bradford Manufacturing Company has a beta of 1.9, while Farley Industries has a beta of 0.75. The required return on an index fund that holds the entire stock market is 8.5%. The risk-free rate of interest is 6.75%. By how much does Bradford's requir..
Investors can invest in a wide variety of annuities and can also use different annuity settlement options to meet specific retirement needs. For each of the following retirement objectives, identify either (1) a specific annuity or (2) an annuity set..
Discuss all of the following statements and state why you agree or disagree with each of them individually. A defined benefit plan can help an older controlling employee in a small business maximize tax-deferred savings. The Internal Revenue Code set..
Frank owns 100% of the stock of Sands, Inc. (a C corporation). In a tax year, Sands, Inc. has income before tax = $1,500,000. This is after Sands paid Frank a salary = $350,000. Sands, Inc. also paid dividends = $100,000. Sands is Frank's only sou..
Suppose Capital One is advertising a 60-month, 5.18% APR mortorcycle loan. If you need to borrow $6000 to purchase your dream harley davidson, what will be your monthly payment?
The Generic Genetic (GG) Corporation pays no cash dividends currently and is not expected to for the next 4 years. Its latest EPS was $5.2, all of which was reinvested in the company. What is your estimate of GG’s intrinsic value per share?
A bond that pays interest annually yields a rate of return of 7.25 percent. The inflation rate for the same period is 3 percent. What is the real rate of return on this bond?
Mr. Z, who is in the 33 percent marginal tax bracket and itemizes deductions, recently inherited $30,000. He is considering three alternative uses for this windfall: Compute the annual increase in Mr. Z's after tax cash for each of these three altern..
Complete the balance sheet and sales information in the table that follows for J. White Industries using the following financial data: TOTAL ASSETS turnover: 1.5 Gross profit margin on sales: (Sales - COGS)/sales = 25%. Partial Income Stmt Info Sales..
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd