What is the expected returns for gajah technologies

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Reference no: EM132956081

Question - Melvin in contemplating investing in Gajah Technologies which report shows has a 10 year annual return of 7.65% and a standard deviation of 13.24%. Over the same period, the technologies Index closing figures are as follows:

Year As at 31 December

2010 1,583.26

2011 1,495.55

2012 1,732.29

2013 2,194.47

2014 2,302.87

2015 2,282.84

2016 2,454.28

2017 3,004.04

2018 2,742.39

2019 3,501.21

2020 4,057.90

Required -

a. Determine the annual market return and average return for the last 10 years.

b. What is the market risk over the same period?

c. If the correlation coefficient between Gajah and the market is 0.87, calculate (with explanation) the beta of the

i. Market

ii. Gajah

d. What is the potential range of returns for the technologies index?

Assuming the risk-free rate of return is 2.5%, what is the expected returns for Gajah Technologies?

Reference no: EM132956081

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