Our Services

Get 15% Discount on your First Order

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

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 IndustriesReynolds IncorporatedMarket Index
YearStock PriceDividendStock PriceDividendIncludes Divs.
2007\$17.250\$1.150\$48.750\$3.00011,663.98
200614.7501.06052.3002.9008,785.70
200516.5001.00048.7502.7508,679.98
200410.7500.95057.2502.5006,434.03
200311.3750.90060.0002.2505,602.28
20027.6250.85055.7502.0004,705.97
We now calculate the rates of return for the two companies and the index:
BartmanReynoldsIndex
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.
BartmanReynoldsIndex
Standard deviation of returns
c. Now calculate the coefficients of variation Bartman, Reynolds, and the Market Index.
BartmanReynoldsIndex
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.
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.
BetaPortfolio Weight
Bartman25%
Stock A0.76915%
Stock B0.98540%
Stock C1.42320%
100%
Portfolio Beta =
Required return on portfolio:= Risk-free rate +Market Risk Premium * * Beta
=
=

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

Related Questions

It’s your first year as an accountant at a national CPA company. You work in the tax area. Find out about a new Federal Tax change for 2021, 2022, and beyond.

It’s your first year as an accountant at a national CPA company. You work in the tax area. Find out about a new Federal Tax change for 2021, 2022, and beyond. Make an infographic to post in this month’s accounting department newsletter. Requirements: 8×11 Portrait size in PDF for final

MODULE ASSESSMENTASSESSMENT BRIEFFMAN3000FASHION COMSUMER AND MARKETPLACECREDIT VALUE: 30 CreditsWORTH: 100% of moduleTYPE: Written

MODULE ASSESSMENT ASSESSMENT BRIEF FMAN3000 FASHION COMSUMER AND MARKETPLACE CREDIT VALUE: 30 Credits WORTH: 100% of module TYPE: Written Report 4000 words and 500 word reflective synopsis +/- 10% ASSESSORS: Claire Marsh & Karen Hickinbotham HAND IN: Week 25 Monday 18th March 2024 12pm midday via Turnitin BUYING CYCLE REPORT

· Explain the past and present of the currency options and futures markets, from over-the-counter options written by international banks to open

· Explain the past and present of the currency options and futures markets, from over-the-counter options written by international banks to open market exchange trading. Discuss the current regulatory environment related to currency options and futures markets.

Part 1 discussion questionDiscussion Question: Connecting Community, Celebration, and Commitment and Improving Your Own

Part 1 discussion question Discussion Question: Connecting Community, Celebration, and Commitment and Improving Your Own Leadership Practices · What are some ways in which community, celebration, and commitment are connected?  · What are the implications for leaders? · What are three things that can be done to improve in each

People believe accountants and certified public accountants (CPAs) a lot. Our jobs are to serve our businesses, our clients, and everyone else.

People believe accountants and certified public accountants (CPAs) a lot. Our jobs are to serve our businesses, our clients, and everyone else. Lewis Sharpstone says in the above AICPA Podcast, “Accounting is a high calling. It is our self-regulation and ethical standards, especially in this area of integrity and objectivity,

Instructions: Due Wed 02/21At least 3 paragraphs long with 3 peer-reviewed references. (no book citation)Describe horizontal analysis. Describe vertical

Instructions: Due Wed 02/21 At least 3 paragraphs long with 3 peer-reviewed references. (no book citation) Describe horizontal analysis. Describe vertical analysis. What is each technique used for? How are the two methods similar? How are they different? Provide visual examples.

Instructions: Due Wed 02/21At least 3 paragraphs long with 3 peer-reviewed references. (no book citation)What is a common size financial statement?

Instructions: Due Wed 02/21 At least 3 paragraphs long with 3 peer-reviewed references. (no book citation) What is a common size financial statement? Provide a sample and explain how these statements are useful for comparing one company to another.

ClassRingInland JewelersDateName Ring Type Cost Personalized Total Years Monthly PaymentDodson Silver Yes

ClassRing Inland Jewelers Date Name Ring Type Cost Personalized Total Years Monthly Payment Dodson Silver Yes 1 Jones Gold Yes 1 Clarke Titanium No 2 Ranger Platinum No 3 McKinley Platinum Yes 3 Broadnax Gold No 2 Burch Titanium Yes 3 Totals Ring Type Cost Silver \$ 400.00 Gold \$

Each reply at least 120 words Reply 1 Advantages and disadvantages of sensitivity analysis The tool used for calculating the impact on dependent variables by

Each reply at least 120 words Reply 1 Advantages and disadvantages of sensitivity analysis The tool used for calculating the impact on dependent variables by various values of independent variables is known as sensitive analysis. Calculated under a specified set of rules and regulations, the process of sensitive analysis is

Attendance Question 02/19/24 Instructions 1. View the following zoom video:Passcode: FQkoe0=? 2. Complete the attendance question for the week

Attendance Question 02/19/24 Instructions 1. View the following zoom video: Passcode: FQkoe0=? 2. Complete the attendance question for the week

5.4 Assignment. Capstone Reflection JournalGetting Started Journal writing provides a more informal opportunity to reflect on learning,

5.4 Assignment. Capstone Reflection Journal Getting Started Journal writing provides a more informal opportunity to reflect on learning, growth, and potential. Journals can also help strengthen writing skills. They afford a time and space for you to do more reflective thinking about topics related to the material, as well as

Discussion Post 1-Why is ethical behavior so important in the field of finance? Provide two business examples (one positive and one negative) that speaks to

Discussion Post 1-Why is ethical behavior so important in the field of finance? Provide two business examples (one positive and one negative) that speaks to how ethical decisions impact company reputations. Describe how ethical choices positively reflect the Christian worldview in business. 2-Should cryptocurrency be regulated? Explain your answer.

FEEDBACK FROMASSIGNMENT 5Offers a competent analysis of the competitors, but it may lack depth or miss some key aspects. Developed a

FEEDBACK FROMASSIGNMENT 5 Offers a competent analysis of the competitors, but it may lack depth or miss some key aspects. Developed a plan that includes how you compare yourself to your competitors currently and how you will differentiate yourself from the competition in the future, but the plan is incomplete.

Course Project Guidelines and Rubric.html ENG 220 Course Project Guidelines and Rubric Overview The final project for this course is the creation of a sales

Course Project Guidelines and Rubric.html ENG 220 Course Project Guidelines and Rubric Overview The final project for this course is the creation of a sales presentation. In a professional career, one may be called upon to conduct research and deliver findings in professional settings. No matter how extensive the research

Hillary HoustonPasta Amore Rebranding Strategy: Embracing Health, Sustainability, and the Modern Italian Family Abstract: This report a

Hillary Houston Pasta Amore Rebranding Strategy: Embracing Health, Sustainability, and the Modern Italian Family Abstract: This report analyzes the rebranding of Pasta Amore, an Italian restaurant franchise aiming to adapt to evolving market demands for health-conscious, sustainable, and modern dining experiences. Through customer and target audience analyses, as well as

Business Consultancy Project Title: How small- or medium-sized soft commodity businesses in South Africa can grow to the next level.

Business Consultancy Project Title: How small- or medium-sized soft commodity businesses in South Africa can grow to the next level. Task 1.1 (Introduction): Session 1 Useful business research, like useful reflection, leads to change. To that end students will be encouraged to take a pragmatic approach to their research, seeking