Our Services

Get 15% Discount on your First Order

risk-return Assignment 2 a. Use the year-end stock price data given to calculate annual returns for Bartman, Reynolds, and the Market Index, and the

February 6, 2024

risk-return

Assignment 2
a. Use the year-end stock price data given to calculate annual returns for Bartman, Reynolds, and the Market Index, and then calculate average returns over the five-year period. Remember, returns are calculated by subtracting the beginning price (previous year year-end price) from the ending price (current year year-end price) to get the capital gain or loss, adding the dividend to the capital gain or loss, and dividing the result by the beginning price (previous year year-end price). Assume that dividends are already included in the index., so in your calculation of index return, you don’t need to add the dividend. Also, you cannot calculate the rate of return for 2002 because you do not have 2001 data.)
Data as given in the problem are shown below:
	Bartman Industries		Reynolds Incorporated		Market Index
Year	Stock Price	Dividend	Stock Price	Dividend	Includes Divs.
2007	$17.250	$1.150	$48.750	$3.000	11,663.98
2006	14.750	1.060	52.300	2.900	8,785.70
2005	16.500	1.000	48.750	2.750	8,679.98
2004	10.750	0.950	57.250	2.500	6,434.03
2003	11.375	0.900	60.000	2.250	5,602.28
2002	7.625	0.850	55.750	2.000	4,705.97
We now calculate the rates of return for the two companies and the index:
	Bartman	Reynolds	Index
2007
	Kenneth D. Jackson: Change in stock price plus any dividends, divided by the previous stock price	2006
2005
2004
2003
Average
Note: To get the average, you could get the column sum and divide by 5, but you could also use the function wizard, fx. Click fx, then statistical, then Average, and then use the mouse to select the proper range. Do this for Bartman and then copy the cell for the other items.
b. Calculate the standard deviation of the returns for Bartman, Reynolds, and the Market Index. (Hint: Use the sample standard deviation formula given in the chapter, which corresponds to the STDEV function in Excel.)
Use the function wizard to calculate the standard deviations.
		Bartman	Reynolds	Index
Standard deviation of returns
c. Now calculate the coefficients of variation Bartman, Reynolds, and the Market Index.
		Bartman	Reynolds	Index
Coefficient of Variation
d. Estimate Bartman’s and Reynolds’s betas as the slope of a regression with stock return on the vertical axis (y-axis) and market return on the horizontal axis (x-axis). (Hint: use Excel’s SLOPE function.)
	Bartman’s beta =
	Reynolds’ beta =
e. The risk-free rate on long-term Treasury bonds is 6.04%. Assume that the market risk premium is 5%. What is the expected return on the market? Now use the SML equation to calculate the two companies required returns.
Market risk premium (RPM)=		5.000%
Risk-free rate =		6.040%
Expected return on market =		Risk-free rate	+	Market risk premium
	=		+
	=
Bartman:
Required return	=		+		x
	=
Reynolds:
Required return	=		+		x
	=
f. If you formed a portfolio that consisted of 50% Bartman and 50% Reynolds, what would be its beta and its required return?
The beta of a portfolio is simply a weighted average of the betas of the stocks in the portfolio, so this portfolio’s beta
would be:
Portfolio beta =
g. Suppose an investor wants to include Bartman Industries’ stock in his or her portfolio. Stocks A, B, and C are currently in the portfolio, and their betas are 0.769, 0.985, and 1.423, respectively. Calculate the new portfolio’s required return if it consists of 25 percent of Bartman, 15 percent of Stock A, 40 percent of Stock B, and 20 percent of Stock C.
		Beta	Portfolio Weight
	Bartman		25%
	Stock A	0.769	15%
	Stock B	0.985	40%
	Stock C	1.423	20%
			100%
	Portfolio Beta =
Required return on portfolio:		=	Risk-free rate +	Market Risk Premium *	* Beta
		=
		=

>Business & Finance homework help

Share This Post

Order a Similar Paper and get 15% Discount on your First Order

Related Questions

Unit 7 Use Berkshire Hathaway Phase IV Part II: Credit Policies and Profitability Analysis Overview: This unit requires you to analyze the impact of

Unit 7 Use Berkshire Hathaway Phase IV Part II: Credit Policies and Profitability Analysis Overview: This unit requires you to analyze the impact of various credit policies on your chosen company’s profitability. Consider different credit terms and policies that the company might adopt and evaluate how these would influence cash

Due Date: Sunday by 11:59pm Total Points: 100 Overview: The plan cost management is the process that establishes the policies, procedures, and

Due Date: Sunday by 11:59pm Total Points: 100 Overview: The plan cost management is the process that establishes the policies, procedures, and documentation for planning, managing, expending and controlling project cost. The plan schedule management is the process that provides the guidance and direction on how the project schedule will

ART/ARTH/BUS 334: THE BUSINESS OF ART TASK SHEET # 5 FOR MODULE: WEEK 5: PROMINENT WOMEN PATRONS OF THE ARTS THROUGH THE AGES DUE DATE: Monday, Feb. 26, by

ART/ARTH/BUS 334: THE BUSINESS OF ART TASK SHEET # 5 FOR MODULE: WEEK 5: PROMINENT WOMEN PATRONS OF THE ARTS THROUGH THE AGES DUE DATE: Monday, Feb. 26, by 9:00 pm! Submit ON TIME in Canvas “Assignments” only!  This task sheet has 3 PARTS. You MUST complete ALL TASKS

10 slide powerpoint Part 1: Terminology Explain Arizona’s definition of an English learner (EL). Briefly discuss the distinctions between the following

10 slide powerpoint Part 1: Terminology Explain Arizona’s definition of an English learner (EL). Briefly discuss the distinctions between the following instructional program models: ESL, bilingual, sheltered English instruction, and structured English immersion (SEI). Part 2: Four Principles of Arizona’s Language Development Approach Briefly describe Arizona’s Language Development Approach and

see attached you will provide examples of Business ethical practices—good and bad—that reflect a particular ethical/moral worldview emphasis. Your

see attached you will provide examples of Business ethical practices—good and bad—that reflect a particular ethical/moral worldview emphasis. Your paper should be written in APA style, using 3–4 references from Business/professional magazines/periodicals. Your completed Business Ethics Assignment should be 1-2 pages only

Curriculum Vitae

Curriculum Vitae Manoj Kumar Address: 493/9B, Saket Nagar,Bhopal – 462024 ( M.P. ). E-mail- [email protected] Mobile No.8827714636 CAREER OBJECTIVE- To obtain a position where my teaching knowledge and soft skills would be well utilized and a opportunity for value based growth and career advancement while contributing handsomely to the most

Definition of History: History is the study of past events, particularly human affairs. It encompasses the recording, analysis, and interpretation of

Definition of History: History is the study of past events, particularly human affairs. It encompasses the recording, analysis, and interpretation of events and their significance over time, often with the aim of understanding the present and anticipating the future. Lesson Notes for Form 1: Title: Introduction to History Objective: To

Post a Response Note: Please review the information posted in the Instructor Insights area this week before working on your

Post a Response Note: Please review the information posted in the Instructor Insights area this week before working on your discussion reply. You will find tips and resources to help. To prepare for this week’s discussion response, review the following resources. · Before beginning work on this discussion post, review Chapter

I have a 5-part assignment. I wrote the first 2 chapters myself. A friend of yours wrote the 3rd part here and it turned out to be plagiarized. Chapter 3

I have a 5-part assignment. I wrote the first 2 chapters myself. A friend of yours wrote the 3rd part here and it turned out to be plagiarized. Chapter 3 will be edited, and once chapter 3 is completed. 4 and 5 will be written. But this assignment is a

I need someone to rewrite the resume- Senior Salesforce Developer role. That has to be unique and copy – paste. It has to have all the key words for this

I need someone to rewrite the resume- Senior Salesforce Developer role. That has to be unique and copy – paste. It has to have all the key words for this position in order to pass the AI.

Week 2 – Assignment: Describe the Purpose and Organization of Managed Care Plans To successfully complete this week’s assignment, assume

Week 2 – Assignment: Describe the Purpose and Organization of Managed Care Plans To successfully complete this week’s assignment, assume that you are the CEO of a hospital. You will want to address the following bulleted points in a paper format. What are the incentives to your organization under the

Using Kaltura, record a video (5–10 minutes) where you reflect on an interprofessional collaboration experience, proposing recommendations for how to

Using Kaltura, record a video (5–10 minutes) where you reflect on an interprofessional collaboration experience, proposing recommendations for how to improve interprofessional collaboration that can be shared with leadership and colleagues. Support these recommendations with references to the literature. The interprofessional project that you reflect on may be one that

you need prepare a report based on the excel sheets that i have uploaded FN626: FINANCE LIVE ASSIGNMENT 3: BITCOIN AND PORTFOLIO

you need prepare a report based on the excel sheets that i have uploaded FN626: FINANCE LIVE ASSIGNMENT 3: BITCOIN AND PORTFOLIO DIVERSIFICATION Drawing on your modules to date and the Presentations made during Finance Live lectures, you are asked to complete the following individual project. Project “Given the returns

1 Name English II Touchstone 2.1 March 6th, 2024 Source Evaluation The source I have chosen for evaluation is “The State of the UBI De

1 Name English II Touchstone 2.1 March 6th, 2024 Source Evaluation The source I have chosen for evaluation is “The State of the UBI Debate: Mapping the Arguments for and against UBI” by D. Afscharian, V. Muliavka, M. S. Ostrowski, and L. Siegel, published published by De Gruyter (2022). The

1. Using epidemiological data, describe a health-related problem in a population. 2. Explain and outline the complexities (organization, structure and function

1. Using epidemiological data, describe a health-related problem in a population. 2. Explain and outline the complexities (organization, structure and function) of the healthcare system and their impact on the health inequities and access barriers in this vulnerable populations 3. Demonstrate how the concepts of population health thinking address the

Describe the economic burden of alcohol use and why it is problematic. Include at least three concepts covered in the readings and how they apply to

Describe the economic burden of alcohol use and why it is problematic. Include at least three concepts covered in the readings and how they apply to economic burden. Include information from the perspective of someone impacted by alcohol use burden. Use the attached files and kink to choose the three concepts.

Book name: The Paper Menagerie (chapter: All the FLAVORS) LINK TO THE BOOK: https://giganotosaurus.org/2012/02/01/all-the-flavors/ 1,000 words Analyzing a

Book name: The Paper Menagerie (chapter: All the FLAVORS) LINK TO THE BOOK: 1,000 words Analyzing a literary work, as with any form of analysis