Suppose that the Treasury bill rate were 6% rather than 4%. Assume that the expected return on the market stays at 10%. Use the betas in Table 8.2 (p. 193) - provided below.

a. Calculate the expected return from Dell.
b. Find the highest expected return that is offered by one of these stocks.
c. Find the lowest expected return that is offered by one of these stocks.
d. Would Ford offer a higher or lower expected return if the interest rate were 6% rather than 4%? Assume that the expected market return stays at 10%.
e. Would Exxon Mobil offer a higher or lower expected return if the interest rate were 8%?

Security A has an expected return of 7 percent, a standard deviation of expectedreturns of 35 percent, a correlation coefficient with the market of -0.3 and a beta coefficient of -0.5. Security B has an expected return of 12 percent, a standard deviation of returns of 10 percent, a correlation with the market of 0.7 and a beta

1. CalculatingReturns. Suppose a stock had an initial price of $84 per share, paid a dividend of $1.40 per share during the year, and had an ending share price of $96. Compute the percentage of total return.
2. Holding Period Returns. A stock has had returns of -17.62 percent, 15.38 percent, 10.95 percent, 26.83 percent, and

You have estimated the following probability distributions of expected future returns for Stocks X and Y:
Stock X
Probability
0.1
0.2
0.4
0.2
0.1
Return
-10%
10%
15%
20%
40%
Stock Y
Probability
0.2
0.2
0.3
0.2
0.1
Return
2%
7%
12%
15%
16%
a. What is theexpected rate of return for Stock

1. What are the portfolio weights for a portfolio that has 145 shares of stock A that sells for $45 per share and 110 shares of Stock B that sells for $27 per share?
2. A portfolio has $2,950 invested in Stock A and $3,700 in Stock B. If theexpectedreturns on these stocks are 8% and 11% respectively, what is theexpected re

(Excel: Calculating means, standard deviations, covariance, and correlation) Given the
probability distributions of returns for stock X and stock Y, compute:
a. theexpected return for each stock, and here
RETURNS
Probability Stock X Stock Y
0.2 5% 12%
0.2 10 10
0.4 12 8
0.15 14 0
0.05 18 2

Calculate theexpected return on the portfolio [E ( R )] of the following assets if you invest 20% in asset 1, 30% in asset 2, and 50% in asset 3. How and why will your answer change if you shift 20% of invested funds from the least risky (asset 3) to the most risky (asset 1) asset?
Asset Return
1.

Based on the following information calculate theexpected return.
State of Economy | Probability of State of Economy | Rate of Return if Status Occurs
Recession .25 -.09
Normal .45 .11
Boom

9. CalculatingReturns and Variability You've observed the following returns on Mary Ann Data Corporation's stock over the past five years: 216 percent, 21 percent, 4 percent, 16 percent, and 19 percent.
a. What was the arithmetic average return on Mary Ann's stock over this five-year period?
b. What was the variance of Mary A

An analyst believes that the economic conditions during the next year will either be Strong, Normal or Weak and she thinks that the Simpson Company's returns will have the following probability distribution. What's the standard deviation of Simpson's returns as estimated by this analyst?
PROBABI