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Chapter_10

# Chapter_10 - Chapter 10 Problems 1-39 Input boxes in tan...

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Chapter 10 Problems 1-39 Input boxes in tan Output boxes in yellow Given data in blue Calculations in red Answers in green NOTE: Some functions used in these spreadsheets may require that the "Analysis ToolPak" or "Solver Add-in" be installed in Excel. To install these, click on "Tools|Add-Ins" and select "Analysis ToolPak and "Solver Add-In."

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Chapter 10 Question 1 Input area: Shares of A 70 Share price of A \$40.00 Shares of B 110 Share price of B \$22.00 Output area: Weight of A = 0.5364 Weight of B = 0.4636

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Chapter 10 Question 2 Input area: Stock A \$ value \$1,200 Stock A E(R) 11.00% Stock B \$ value \$1,900 Stock B E(R) 16.00% Output area: Weight of A = 0.3871 Weight of B = 0.6129 Portfolio E(R) = 14.06%
Chapter 10 Question 3 Input area: Weight of X 50.00% Weight of Y 30.00% Weight of Z 20.00% Stock X E(R) 11.00% Stock Y E(R) 17.00% Stock Z E(R) 14.00% Output area: Portfolio E(R) = 13.40%

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Chapter 10 Question 4 Input area: Portfolio value \$10,000 Stock X E(R) 14.00% Stock Y E(R) 9.00% Portfolio E(R) 12.20% Output area: Weight of Stock X = 0.6400 Weight of Stock Y = 0.3600 Dollar in Stock X = \$6,400.00 Dollars in Stock Y = \$3,600.00
Chapter 10 Question 5 Input area: State Probability Return Recession 0.20 (0.05) Normal 0.50 0.12 Boom 0.30 0.25 Output area: State Probability Return Product Recession 0.20 (0.05) (0.0100) Normal 0.50 0.12 0.0600 Boom 0.30 0.25 0.0750 Expected return 0.1250

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Chapter 10 Question 6 Input area: State Probability Stock A Stock B Recession 0.10 0.06 (0.20) Normal 0.60 0.07 0.13 Boom 0.30 0.11 0.33 Output area: Stock A Probability Return Product Recession 0.10 0.06 0.0060 Normal 0.60 0.07 0.0420 Boom 0.30 0.11 0.0330 E(R) = 0.0810 Standard Deviation = 1.92% Stock B Probability Return Product Recession 0.10 (0.20) (0.0200) Normal 0.60 0.13 0.0780 Boom 0.30 0.33 0.0990 E(R) = 0.1570 Standard Deviation = 14.89%
Product (0.0210) 0.00044 0 (0.0110) 0.00012 0 0.0290 0.00084 0 Variance = 0.00037 Product (0.3570) 0.12745 0.01 (0.0270) 0.00073 0 0.1730 0.02993 0.01 Variance = 0.02216 Return Deviation Squared Deviation Return Deviation Squared Deviation

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Chapter 10 Question 7 Input area: State Probability Stock A Depression 0.10 -0.045 Recession 0.20 0.044 Normal 0.50 0.120 Boom 0.20 0.207 Output area: Stock A Probability Return Product Depression 0.10 -0.05 (0.0045) Recession 0.20 0.04 0.0088 Normal 0.50 0.12 0.0600 Boom 0.20 0.21 0.0414 E(R) = 0.1057 Standard Deviation = 7.20%
Product (0.1507) 0.02271 0 (0.0617) 0.00381 0 0.0143 0.00020 0 0.1013 0.01026 0 Variance = 0.00519 Return Deviation Squared Deviation

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Chapter 10 Question 8 Input area: Weight of G 20.00% Weight of J 70.00% Weight of K 10.00% Stock G E(R) 8.00% Stock J E(R) 15.00% Stock K E(R) 24.00% Output area: Portfolio E(R) = 14.50%
Chapter 10 Question 9 Input area: State Probability Stock A Stock B Stock C Recession 0.70 0.07 0.15 0.33 Boom 0.30 0.13 0.03 (0.06) a. weights 0.33 0.33 0.33 b. weights 0.20 0.20 0.60 Output area: a. Stock A Probability Product Recession 0.70 0.1833 0.1283 Boom 0.30

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Chapter_10 - Chapter 10 Problems 1-39 Input boxes in tan...

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