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ASS3.xlsx

ASS3.xlsx - Lin Zhang 50103135 Question 1 a For ABC...

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Lin Zhang 50103135 Question 1 a) For ABC Percentage Return = ( \$34*1000-\$40*1000+\$1.6*1000)/(\$40*1000) For XYZ Percentage Return= ( \$240*300- \$180*300+0)/(\$180*300) The profolio over the last yeat b) For ABC Dividend Yield =(\$1.6*1000)/((\$34*1000) Percentage Capital Gain= (\$34*1000-\$40*1000)/(\$40*1000) For XYZ Dividend Yield Percentage Capital Gain= (\$240*300-\$180*300)/(\$180*300) C) 1+ Real Return = ( 1+ nominal return)/(1+ inflation rate) For ABC 1+real return real return For XYZ 1+real return

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real return Question 2 a) Price ( each outcome Probability Actual Return \$ 1.00 10% -96.88% \$ 24.00 20% -25.00% \$ 33.00 30% 3.13% \$ 45.00 30% 40.63% \$ 60.00 10% 87.50% Expected Return b) Actual Returnr-E(r ) (r-E(r ))^2 p* (r-E(r )^2 -96.9% -104.06% 108.29% 10.83% -25.0% -32.19% 10.36% 2.07% 3.1% -4.06% 0.17% 0.05% 40.6% 33.44% 11.18% 3.35% 87.5% 80.31% 64.50% 6.45% Expected Variance 22.75% Standard Deviation 47.70% Question 3 a) Beta Rf E(Rm) E( r) Walmart 0.19 0.01 0.08 2.33% Apple 1.44 0.01 0.08 11.08% Expected Value formula E(r )=rf+ beta(rm-rf) b)
Apple has a higher expected return than Walmart because Apple has higher market which mean the sales of the products are depend on the economy condition. If the economy is going well, customers will buy more Apple's products than Walma

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