Required A Required BWhat is the safest attainable portfolio under these restrictions?What is the safest attainable portfolio under these restrictions? Your eccentric Aunt Claudia has left you $50,000 in BP shares plus $50,000 cash. Unfortunately, her will requires that the BP stock notbe sold for one year and the $50,000 cash must be entirely invested in one of the stocks shown below.BHP BillitonBPSiemensNestléSonySanofiAgricultural BankStandard deviation (%)Required A Required BBHPBilliton1.0020.60BHPBPSiemensNestléSonySanofiAgricultural BankBP0.311.0029.40Siemens0.050.331.00Portfolio Variance9.00Complete this question by entering your answers in the tabs below.Nestlé0.340.220.121.0015.40Sony0.520.190.130.301.0027.70Sanofi0.440.360.050.480.201.00a. Calculate the portfolio variance for seven different portfolios.Note: Use decimals, not percents, in your calculations. Do not round intermediate calculations. Enter your answers as adecimal rounded to 5 places.b. What is the safest attainable portfolio under these restrictions?28.90AgriculturalBank0.410.090.13Calculate the portfolio variance for seven different portfolios.Note: Use decimals, not percents, in your calculations. Do not round intermediate calculations. Enter your answers as adecimal rounded to 5 places.0.060.270.281.0026.40

Risk and return are essential financial principles. The term “risk” refers to the uncertainty and…

a. Calculate the portfolio variance for seven different portfolios. Note: Use decimals, not percents, in your calculations. Do not round intermediate calculations. Enter your answers as a decimal rounded to 5 places. b. What is the safest attainable portfolio under these restrictions?

a. Calculate the portfolio variance for seven different portfolios. Note: Use decimals, not percents, in your calculations. Do not round intermediate calculations. Enter your answers as a decimal rounded to 5 places. b. What is the safest attainable portfolio under these restrictions?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

Help Your eccentric Aunt Claudia has left you $50,000 in BP shares plus $50,000 cash. Unfortunately, her will requires that the BP stock not be sold for one year and the $50,000 cash must be entirely invested in one of the stocks shown below. BHP Billiton BP Siemens Nestlé Sony Sanofi Agricultural Bank Standard deviation, % Agricultural BHP Billiton BP 1.00 Siemens Nestlé Sony Sanofi Bank 0.44 0.21 -0.05 0.21 0.15 0.24 1.00 0.40 0.24 0.27 0.36 0.27 1.00 0.26 0.33 0.29 0.21 1.00 0.34 0.27 -0.06 1.00 0.27 0.35 1.00 0.17 1.00 26.2 22.8 22.5 13.6 27.6 17.5 25.5 a. Calculate the portfolio variance for seven different portfolios. Note: Use decimals, not percents, in your calculations. Do not round intermediate calculations. Enter your answers as a decimal rounded to 5 places. b. What is the safest attainable portfolio under these restrictions? Complete this question by entering your answers in the tabs below. Required A Required B Calculate the portfolio variance for seven different…
Your eccentric Aunt Claudia has left you $50,000 in BP shares plus $50,000 cash. Unfortunately, her will requires that the BP stock not be sold for one year and the $50,000 cash must be entirely invested in one of the stocks shown below. BHP Billiton BP Siemens Nestlé Sony Sanofi Agricultural Bank Standard deviation, % Agricultural BHP Billiton BP 1.00 Siemens Nestlé Sony Sanofi Bank 0.44 0.21 -0.05 0.21 0.15 0.24 1.00 0.40 0.24 0.27 0.36 0.27 1.00 0.26 0.33 0.29 0.21 1.00 0.34 0.27 -0.06 1.00 0.27 0.35 1.00 0.17 1.00 26.2 22.8 22.5 13.6 27.6 17.5 25.5 a. Calculate the portfolio variance for seven different portfolios. Note: Use decimals, not percents, in your calculations. Do not round intermediate calculations. Enter your answers as a decimal rounded to 5 places. b. What is the safest attainable portfolio under these restrictions? Complete this question by entering your answers in the tabs below. Required A Required B Calculate the portfolio variance for seven different portfolios.…
Suppose you sell short 200 shares of BP ADR currently selling at $40 per share. You give your broker $5000 to establish your margin account. You have no interest on the funds in your margin account. Assume that BP also has paid a year-end dividend of $0.5 per share, what will be your rate of return after one year if the BP price is $38. (please keep three decimal places, such as 0.031, NOT 3.1%)
Your eccentric Aunt Claudia has left you $50,000 in BP shares plus $50,000 cash. Unfortunately, her will requires that the BP stock not be sold for one year and the $50,000 cash must be entirely invested in one of the stocks shown below. Toronto Dominion Bank BHP Billiton Siemens Nestlé LVMH Toronto Dominion Bank Samsung BP Standard deviation (%) BHP Billiton 1.00 BHP Siemens Nestlé LVMH Toronto Dominion Bank Samsung BP 28.60 Portfolio Variance Siemens 0.39 1.00 25.40 Nestlé -0.05 0.29 1.00 9.24 LVMH 0.42 0.14 0.04 1.00 20.20 0.60 0.16 0.05 0.38 1.00 11.70 Samsung 0.52 0.36 -0.03 0.56 0.20 1.00 30.50 BP 0.49 -0.07 0.05 0.06 a. Calculate the portfolio variance for seven different portfolios. (Use decimals, not percents, in your calculations. Do not round intermediate calculations. Enter your answers as a decimal rounded to 5 places.) 0.35 0.36 1.00 19.80
Amherst Corporation, an investment banking company, often has extra cash to invest. Suppose Amherst buys900 shares of Hurricane Corporation stock at $57 per share, representing less than 5% ofHurricane’s outstanding stock. Amherst expects to hold the Hurricane stock for one month andthen sell it. The purchase occurs on December 15, 2018. On December 31, the market price of ashare of Hurricane stock is $58 per share.Requirements1. What type of investment is this for Amherst? Give the reason for your answer.2. Record Amherst’s purchase of the Hurricane stock on December 15 and the adjustment tomarket value on December 31.3. Show how Amherst would report this investment on its balance sheet at December 31 andany gain or loss on its income statement for the year ended December 31, 2018.
Rachelle Ching is an investment analyst. She was asked by Macrille Samson, an investor, to assess the viability of an investment in Consti Corp. Macrille expects to hold the investment for five (5) years and sell it at the end of the holding period. Rachelle forecasted that Consti Corp. will pay the following dividends: Year Dividend per Share 5 P3.60 4 3.48 3 3.22 2 2.98 1 2.50 Rachelle expects that at the end of the third year, the selling price of the company's stock will be P125 per share. She also estimated that the cost of capital is 5%. The current stock price is P150 per share. What is the value of the shares?
If iOS Corp. issues an additional $8 million of debt and uses this money to retire common stock, what will be the expected return on the stock? Assume that the change in capital structure does not affect the risk of the debt, and recall that the WACC under the initial capital structure is 13.85%. Enter your answer as a percentage. Do not include the percentage sign in your answer. Enter your answer rounded to 2 DECIMAL PLACES. TE= Number Click "Verify" to proceed to the next part of the question.
Y8 Sarah bought stock on margin 8 months ago borrowing $10,000 at 7% EAR. She has just received a margin call for $3000 and her maintenance and initial margin was 15%. What must be the current value of the assets, BEFORE THE CALL, in her margin account? [Choose closest] a) Cannot be determined with the information provided, we need the number of shares b) Cannot be determined with the information provided, we need to know the original asset value c) $0 d) $9,310.51 e) $12,310.51 The answer is d) but why?
Monmouth Laboratories, Inc. pays a $3.29 dividend every year and will maintain this policy forever. What price should you pay for one share of common stock if you want an annual return of 7.5% on your investment? Select one: a. $43.87 b. $21.92 c. $43.84 d. $44.84 e. $43.20
Lancaster Corporation, an investment banking company, often has extra cash to invest. Suppose Lancaster buys500 shares of Knight Corporation stock at $40 per share, representing less than 5% of Knight’soutstanding stock. Lancaster expects to hold the Knight stock for one month and then sell it.The purchase occurs on December 15, 2018. On December 31, the market price of one share ofKnight stock is $47 per share.Requirements1. What type of investment is this for Lancaster? Give the reason for your answer.2. Record Lancaster’s purchase of the Knight stock on December 15 and the adjustment tomarket value on December 31.3. Show how Lancaster would report this investment on its balance sheet at December 31 andany gain or loss on its income statement for the year ended December 31, 2018
You sold 300 shares of a $50 stock short, as required you put up $7,500 of funds as collateral for this position. If the maintenance requirement for this stock was 35%, how far could the stock rise before you received a maintenance call? Group of answer choices a. $32.50 b. $57.70 c. $55.56 d. $67.50
Space used (includes formatting): 0/15000 Part D Eliza has only one investment: $15,000 in stock shares of IFruit Computing. The stock's annual returns for the last 10 years have averaged around 8%. Evaluate the risk level of Eliza's investment. Is there anything she can do to make her investment less risky? Explain your answer. BIUX² X₂ 15px Space used (includes formatting): 0/15000 C AVV 14 Apr 15 5:45 2

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS