MGFC10_915_Assg2_Fall2016 - MGFC10H3(Intermediate Finance Assignment 2 Due Date By 2pm Prof Syed W Ahmed STUDENTS NAME Last First Middle STUDENTS I.D NO

MGFC10_915_Assg2_Fall2016 - MGFC10H3(Intermediate Finance...

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MGFC10H3 (Intermediate Finance) Assignment 2 Due Date: Nov 30, 2016 By 2pm Prof. Syed W. Ahmed STUDENT’S NAME:________________________________________________ Last First Middle STUDENT’S I.D. NO.:_______________________________________________ QUESTION NO. MAX. MARKS MARK OBTAINED 1 20 __________________ 2 20 __________________ 3 20 __________________ 4 20 __________________5 20 __________________ TOTAL MARKS 100 __________________ BONUS QUESTION 2 additional mark in the course grade The University of Toronto's Code of Behaviour on Academic Matters applies to all University of Toronto Scarborough students. The Code prohibits all forms of academic dishonesty including, but not limited to, cheating, plagiarism, and the use of unauthorized aids. Students violating the Code may be subject to penalties up to and including suspension or expulsion from the University. Management, 1265 Military Trail, Toronto, ON, M1C 1A4, Canada
-2- QUESTION 1: The following table lists possible rates of returns together with the respective probabilities on ABC Inc. stock and on the market (M). RABCRMProbability (RABC, RM) 0.07 0.05 0.20 0.09 0.05 0.15 0.09 0.07 0.25 0.11 0.07 0.10 0.13 0.07 0.20 0.13 0.08 0.10 a.List the possible values for RABCand the probabilities that correspond to those values. Compute the expected value, variance, and standard deviation for RABC. b.List the possible values for RMand the probabilities that correspond to those values. Compute the expected value, variance, and standard deviation for RM. c.Calculate the covariance, and coefficient of correlation of RABCand RM.

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