Buy Fundamentals Of Finance Assignment

Assessment 8

Answer the following questions and complete the following problems:

Questions

In a Word document, respond to the following. Number your responses 1–2.

1. Explain why expected return is considered forward-looking. What challenges arise in using expected return?

2. Explain how differences in allocations between the risk-free security and the market portfolio can determine the level of market risk.

Use references to support your responses as needed. Be sure to cite all references using correct APA style. Your responses should be free of grammar and spelling errors, demonstrating strong written communication skills.

Problems

Buy Fundamentals Of Finance Assignment

In either a Word document or Excel spreadsheet, complete the following problems.

· You may solve the problems algebraically, or you may use a financial calculator or an Excel spreadsheet.

· If you choose to solve the problems algebraically, be sure to show your computations.

· If you use a financial calculator, show your input values.

· If you use an Excel spreadsheet, show your input values and formulas.

1. Based on the probability and percentage of return for the three economic states in the table below, compute the expected return.

Economic State

Probability

Percentage of Return

Fast Growth

0.10

60

Slow Growth

0.50

30

Recession

0.40

-23

2. If the risk-free rate is 7 percent and the risk premium is 4 percent, what is the required return?

3. Suppose that the average annual return on the Standard and Poor’s 500 Index from 1969 to 2005 was 14.8 percent. The average annual T-bill yield during the same period was 5.6 percent. What was the market risk premium during these 10 years?

4. Conglomco has a beta of 0.32. If the market return is expected to be 12 percent and the risk-free rate is 5 percent, what is Conglomco’s required return? Use the capital asset pricing model (CAPM) to calculate Conglomco’s required return.

5. Calculate the beta of a portfolio that includes the following stocks:

· Conglomco stock, which has a beta of 3.9 and comprises 35 percent of the portfolio.

· Supercorp stock, which has a beta of 1.7 and comprises 25 percent of the portfolio.

· Megaorg stock, which has a beta of 0.3 and comprises 40 percent of the portfolio.

Assessment 8

Answer the following questions and complete the following problems:

Questions

In a Word document, respond to the following. Number your responses 1

–

2.

1.

Explain why expected return is considered forward

–

looking. What challenges arise

in using expected return?

2.

Explain how differences in allocations between the risk

–

free security and the market

portfolio can determine the level of market risk.

Use references

to support your responses as needed. Be sure to cite all

references using correct APA style. Your responses should be free of grammar

and spelling errors, demonstrating strong written communication skills.

Problems

In either a Word document or Excel sprea

dsheet, complete the following

problems.

·

You may solve the problems algebraically, or you may use a financial calculator or

an Excel spreadsheet.

·

If you choose to solve the problems algebraically, be sure to show your

computations.

·

If you use a financial calculator, show your input values.

·

If you use an Excel spreadsheet, show your input values and formulas.

1.

Based on the probability and percentage of return for the three economic states in

the table below, compute the expected return

.

Economic State

Probability

Percentage of Return

Fast Growth

0.10

60

Slow Growth

0.50

30

Recession

0.40

–

23

2.

If the risk

–

free rate is 7 percent and the risk premium is 4 percent, what is the

required return?

Assessment 8

Answer the following questions and complete the following problems:

Questions

In a Word document, respond to the following. Number your responses 1–2.

1. Explain why expected return is considered forward-looking. What challenges arise

in using expected return?

2. Explain how differences in allocations between the risk-free security and the market

portfolio can determine the level of market risk.

Use references to support your responses as needed. Be sure to cite all

references using correct APA style. Your responses should be free of grammar

and spelling errors, demonstrating strong written communication skills.

Problems

In either a Word document or Excel spreadsheet, complete the following

problems.

You may solve the problems algebraically, or you may use a financial calculator or

an Excel spreadsheet.

If you choose to solve the problems algebraically, be sure to show your

computations.

If you use a financial calculator, show your input values.

If you use an Excel spreadsheet, show your input values and formulas.

1. Based on the probability and percentage of return for the three economic states in

the table below, compute the expected return.

Economic State Probability Percentage of Return

Fast Growth 0.10 60

Slow Growth 0.50 30

Recession 0.40 -23

2. If the risk-free rate is 7 percent and the risk premium is 4 percent, what is the

required return?

The price is based on these factors:

Academic level

Number of pages

Urgency

Basic features

- Free title page and bibliography
- Unlimited revisions
- Plagiarism-free guarantee
- Money-back guarantee
- 24/7 support

On-demand options

- Writer’s samples
- Part-by-part delivery
- Overnight delivery
- Copies of used sources
- Expert Proofreading

Paper format

- 275 words per page
- 12 pt Arial/Times New Roman
- Double line spacing
- Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Delivering a high-quality product at a reasonable price is not enough anymore.

That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more