# Return on stock,expected portfolio return,return probability

36. Ahmed purchased a stock for $45 one year ago. The stock is now worth $65. During the year, the stock paid a dividend of $2.50. What is the total return to Ahmed from owning the stock?

a. 5%

b. 44%

c. 35%

d. 50%

37. If you were to compare the returns of an individual stock to a market index, select the answer below that is most true.

a. The returns of the individual stock will show more variability than those of the market index.

b. The returns of the individual stock will show less variability than those of the market index.

c. The returns of the individual stock will show the same level of variability than those of the market index, if they have the same beta.

d. None of the above.

38. You have invested 40 percent of your portfolio in an investment with an expected return of 12 percent and 60 percent of your portfolio in an investment with an expected return of 20 percent. What is the expected return of your portfolio?

a. 15.2%

b. 16.0%

c. 16.8%

d. 17.6%

39. The expected return for Stock P is 30 percent. If we know the following information about Stock P, then what return will it produce in the OK state of the world?

Return Probability

Not So Good 0.2 0.25

Ok ? 0.5

Dynamite! 0.4 0.25

A. .3

B. .2

C. .4

D. It is impossible to determine

40. The risk-free rate of return is currently 3 percent, whereas the market risk premium is 6 percent. If the expected return on Briar Tek's stock is 13.80% , then what is Briar Tek's Beta?

a. 1.7

b. 1.9

c. 1.8

d. 1.2

https://brainmass.com/business/beta-and-required-return-of-a-project/return-on-stock-expected-portfolio-return-return-probability-432503

#### Solution Preview

36 - Return = 65 + 2.5 -45 = 22.50

Return in % = 22.5/45 = 50%

37 - d. None of the above.

38 - Expected return on ...

#### Solution Summary

The solution answers multiple choice questions related to Return on stock, expected portfolio return, return probability, beta.

You are trying to set up a portfolio that consists of a corporate bond fund and a common stock fund.

Compute the covariance of the corporate bond fund and the common stock fund.

Compute the portfolio expected return and portfolio risk for each of the following percentages invested in a corporate bond fund: a. 30% , b. 50%, c. 70%

You are trying to set up a portfolio that consists of a corporate bond fund and a common stock fund. the following information about the annual return (per $1,000)of each of these investments under different economic condition is available, along with probability that each of these economic conditions will occur:

probability economic corporate common

conditions bond fund stock fund

0.10 Recession -$30 -$150

0.15 Stagnation 50 -20

0.35 Slow growth 90 120

0.30 Moderate growth 100 160

0.10 High growth 110 250

Compute the covariance of the corporate bond fund and the common stock fund.

(I need detail calculation and explanation.)

Suppose that you wanted to create a portfolio that consists of a corporate bond fund and a common stock fund. Compute the portfolio expected return and portfolio risk for each of the following percentages invested in a corporate bond fund:

a. 30% b. 50% c. 70%

d. on the bases of the results of (a) through (c), which portfolio would you recommended? Explain.

(I need a detail calculation and explanation for - Computation the portfolio expected return and portfolio risk for each of the following percentages invested in a corporate bond fund)

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