What is the expected return of mass

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Reference no: EM132016738

The return on shares of Mass Company are predicted under the following equally likely states of nature:

Recession -0.25

Normal +0.11

Boom +0.20

What is the expected return of Mass?

0.01

0.02

0.03

0.04

0.05

The return on shares of Orange Company are predicted under the following equally likely states of nature:

Recession -0.11

Normal +0.05

Boom +0.24

What is the standard deviation of Orange?

0.14

0.22

0.26

0.32

0.45

Larry Corp.'s stock price is $12 per share. Curley Corp.'s stock price is $28 per share. Moe Corp.'s stock price is $50 per share. If a portfolio consists of 100 shares of each stock, what percent of the portfolio is comprised of Moe Corp?

25%

35%

45%

56%

64%

The return on Jimmy Corporation in recession is -24% and in boom is +34%. The return on Walter Corporation in recession is +45% and in boom is -18%. What is the covariance between the stocks? There is 0.60 chance of a boom and 0.40 chance is a recession.

0.054

- 0.054

0.088

- 0.088

Toyota Corp.'s stock price has a variance of returns equal to 0.0315. Honda Corp.'s stock price has a variance of returns equal to 0.0495. The covariance between Toyota and Honda is 0.0695. What is the standard deviation of a portfolio consisting of 50% Toyota and 50% Honda?

0.0551

0.0439

0.4862

0.2346

0.4637

The covariance between Eb Corporation's common stock returns and the return on the market portfolio is 0.006. The standard deviation of the market is 0.3. What is the beta of Eb Corporation's common stock?

0.02

0.067

0.087

0.232

0.334

The beta of stock Golden is 1.25. The risk free rate of interest is 2.5% and the expected return on the market portfolio is 12.5%. According to the capital asset pricing model, which of the following comes closest to the expected return of Golden?

21.5%

10.5%

17.0%

15.0%

7.0%

Which of the following comes closest to the beta of a portfolio that has 55% of the total invested in the risk free rate of interest and 45% of the total invested in the market portfolio?

1.00

0.45

0.55

0.50

Need more information to answer the question.

The expected return on Golden Inc based on CAPM is 11.875%. The risk free rate of interest is 2.5% and the expected return on the market is 10%. According to the capital asset pricing model, which of the following comes closest to the beta of Golden?

1.25

1.35

1.45

1.55

1.65

PLEASE SHOW ALL WORK, EACH STEP, AND CALCULATIONS

Reference no: EM132016738

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