eoc_chapter_11 - Chapter 11 Problems 1-38 Input boxes in...

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Chapter 11 Problems 1-38 Input boxes in tan Output boxes in yellow Given data in blue Calculations in red Answers in green
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Chapter 11 Question 1 Input area: Shares of A 80 Share price of A $42.00 Shares of B 40 Share price of B $68.00 Output area: Weight of A = 0.5526 Weight of B = 0.4474
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Chapter 11 Question 2 Input area: Stock A $ value $500 Stock A E(R) 12.00% Stock B $ value $1,600 Stock B E(R) 18.00% Output area: Weight of A = 0.2381 Weight of B = 0.7619 Portfolio E(R) = 16.57%
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Chapter 11 Question 3 Input area: Weight of X 60.00% Weight of Y 25.00% Weight of Z 15.00% Stock X E(R) 10.00% Stock Y E(R) 14.00% Stock Z E(R) 16.00% Output area: Portfolio E(R) = 11.90%
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Chapter 11 Question 4 Input area: Portfolio value $10,000 Stock X E(R) 16.00% Stock Y E(R) 11.00% Portfolio E(R) 14.80% Output area: Weight of Stock X = 0.7600 Weight of Stock Y = 0.2400 Dollar in Stock X = $7,600.00 Dollars in Stock Y = $2,400.00
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Chapter 11 Question 5 Input area: State Probability Return Recession 0.30 -0.02 Boom 0.70 0.24 Output area: State Probability Return Product Recession 0.30 (0.02) (0.0060) Boom 0.70 0.24 0.1680 Expected return 0.1620
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Chapter 11 Question 6 Input area: State Probability Return Recession 0.30 (0.09) Normal 0.60 0.10 Boom 0.10 0.30 Output area: State Probability Return Product Recession 0.30 (0.09) (0.0270) Nprmal 0.60 0.10 0.0600 Boom 0.10 0.30 0.0300 Expected return 0.0630
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Chapter 11 Question 7 Input area: State Probability Stock A Stock B Recession 0.25 0.06 (0.20) Normal 0.45 0.07 0.13 Boom 0.30 0.11 0.33 Output area: Stock A Probability Return Product Recession 0.25 0.06 0.0150 Normal 0.45 0.07 0.0315 Boom 0.30 0.11 0.0330 E(R) = 0.0795 Standard Deviation = 2.04% Stock B Probability Return Product Recession 0.25 (0.20) (0.0500) Normal 0.45 0.13 0.0585 Boom 0.30 0.33 0.0990 E(R) = 0.1075 Standard Deviation = 19.68%
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Product (0.0195) 0.00038 0 (0.0095) 0.00009 0 0.0305 0.00093 0 Variance = 0.00041 Product (0.3075) 0.09456 0.02 0.0225 0.00051 0 0.2225 0.04951 0.01 Variance = 0.03872 Return Deviation Squared Deviation Return Deviation Squared Deviation
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Chapter 11 Question 8 Input area: Weight of G 35.00% Weight of J 50.00% Weight of K 15.00% Stock G E(R) 8.00% Stock J E(R) 17.00% Stock K E(R) 22.00% Output area: Portfolio E(R) = 14.60%
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Chapter 11 Question 9 Input area: State Probability Stock A Stock B Recession 0.40 0.12 0.15 Boom 0.60 0.10 0.03 a. weights 0.33 0.33 b. weights 0.15 0.15 Output area: a. Stock A Probability Product Recession 0.40 0.2000 0.0800 Boom 0.60 0.0233 0.0140 E(R) = 0.0940 b. Stock A Probability Return Product Recession 0.40 0.2715 0.1086 Boom 0.60 (0.0225) (0.0135) E(R) = 0.0951 Portfolio Return
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Stock C 0.33 (0.06) 0.33 0.70 Product 0.1764 0.03112 0.01 (0.1176) 0.01383 0.01 Variance = 0.02074 Return Deviation Squared Deviation
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Chapter 11 Question 10 Input area: State Probability Stock A Stock B Boom 0.20 0.30 0.45 Good 0.35 0.12 0.10 Poor 0.25 0.01 (0.15) Bust 0.20 (0.20) (0.30) weights 0.40 0.20 Output area: Stock A Probability Product
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This note was uploaded on 05/01/2009 for the course FINC 106 taught by Professor Dr.nehale during the Spring '09 term at Baptist College of Health Sciences.

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eoc_chapter_11 - Chapter 11 Problems 1-38 Input boxes in...

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