Determine the expected return, Cost Accounting

Assignment Help:

Imagine a world in which there are only two investment assets: Hasbro Inc. Stock (HAS) and McDonalds stock (MCD). The table below lists annual total returns (%) for each of the last ten years (calculated based on adjusted closing prices for the first day of February in each month provided by YahooFinance (thank you Yahoo!). For each of the questions below, please write down the formula you would use to calculate these values by hand (or with a calculator) even if you use Excel or another program to calculate the values.

398_calculate the expected return.png

a. Based on these data, calculate the expected return on HAS and MCD.

 b. What is the variance of the return for HAS? The standard deviation? Do the same calculations for MCD. 

c. What is the covariance of HAS returns with MCD returns? What is the correlation of the two returns?  

d. Evaluate the risk and return for a portfolio with each of the weight combinations below. Use the standard deviation-not the variance-to characterize risk. You may use the Excel file on SmartSite to calculate the answer, but do not forget to write the formula you would have used to do the calculation by hand below. Which of these portfolios would you definitely choose not to adopt, no matter your risk preferences? Why?

645_calculate the expected return 1.png


Related Discussions:- Determine the expected return

Goal definition and communication - standard costing, Goal Definition and C...

Goal Definition and Communication - Behavioural Aspects of Standards Goal Definition The desired goals should be clearly defined to individuals, departments and the organ

Prepare a preliminary cost benefit analysis, Managers need financial inform...

Managers need financial information to help them make decisions, communicate important information about their organization, and demonstrate fiscal responsibility to stakeholders.

Internal users of accounting information, Describe the ways in which the ne...

Describe the ways in which the needs of internal and external users of accounting information are the same and different.

Prepare the journal entries to record depreciation, Moore Corporation follo...

Moore Corporation follows a policy of a 10% depreciation charge per year on all machinery and a 5% depreciation charge per year on buildings (the corporation uses the nearest full

Regression analysis, what is regression analysis and its applicability to t...

what is regression analysis and its applicability to the course of cost accounting

Cost unit, explain various type of cost ccounting

explain various type of cost ccounting

Allocation of scarce resourses, LaNora White received her accounting degree...

LaNora White received her accounting degree in 1992. Since graduating, she has obtained significant experience in a variety of job settings. Her skills include auditing, income and

Process of setting standards in standard costing, Process of Setting Standa...

Process of Setting Standards in Standard Costing Establishing correct a standard is extremely important due to the accuracy of the standards usually finds out the success of t

What is a statement of cash flows, 1.What is a Statement of Cash Flows? How...

1.What is a Statement of Cash Flows? How does it differ from an Income Statement? 2.What unique information does the Statement of Cash Flows deliver to investors? Why do they care?

Assessment item 2, QUESTION 1 Job costing Create a spreadsheet solution to...

QUESTION 1 Job costing Create a spreadsheet solution to the following problem. Follow the template provided. Play the Job cost podcasts and work through the example problem in tho

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd