1- Investment Return FedEx Corp. stock ended the previous year at $ 103.39 per share. It paid a $ 0.35 per share dividend last year. It ended last year at $ 106.69. If you owned 300 shares of FedEx, what was your dollar return and percent return? ( LG9- 1)

2- Investment Return Sprint Nextel Corp. stock ended the previous year at $ 23.36 per share. It paid a $ 2.37 per share dividend last year. It ended last year at $ 18.89. If you owned 500 shares of Sprint, what was your dollar return and percent return? ( LG9- 1)

3- Risk versus Return Rank the following three stocks by their risk- return relationship, best to worst. Rail Haul has an average return of 12 percent and standard deviation of 25 percent. The average return and standard deviation of Idol Staff are 15 percent and 35 percent; and of Poker- R- Us are 9 percent and 20 percent. ( LG9- 4)

4- Risk versus Return Rank the following three stocks by their risk- return relationship, best to worst. Night Ryder has an average return of 13 percent and standard deviation of 29 percent. The average return and standard deviation of WholeMart are 11 percent and 25 percent; and of Fruit Fly are 16 percent and 40 percent. ( LG9- 4)

5- Average Return The past five monthly returns for Kohls are 3.54 percent, 3.62 percent, 2 1.68 percent, 9.25 percent, and 2 2.56 percent. What is the average monthly return? ( LG9- 1)

6- Average Return The past five monthly returns for PG& E are 2 3.17 percent, 3.88 percent, 3.77 percent, 6.47 percent, and 3.58 percent. What is the average monthly return? ( LG9- 1)

7- Portfolio Weights If you own 300 shares of Alaska Air at $ 42.88, 350 shares of Best Buy at $ 51.32, and 250 shares of Ford Motor at $ 8.51, what are the portfolio weights of each stock? ( LG9- 7)

8-Portfolio Weights If you own 400 shares of Xerox at $ 17.34, 500 shares of Qwest at $ 8.15, and 350 shares of Liz Claiborne at $ 44.73, what are the portfolio weights of each stock? ( LG9- 7)

9- Expected Return Compute the expected return given these three economic states, their likelihoods, and the potential returns: ( LG10- 1)

From Table-

Economic State: Fast growth-

Probability=0.2 Return= 40%

Economic State: Slow growth-

Probability= 0.4 Return= 10

Economic State: Recession-

Probability=0.4 Return= -25

10- Expected Return Compute the expected return given these three economic states, their likelihoods, and the potential returns: ( LG10- 1)

From Table-

Economic State: Fast growth-

Probability=0.2 Return= 35%

Economic State: Slow growth-

Probability= 0.6 Return= 10

Economic State: Recession-

Probability=0.2 Return= -30

11- CAPM Required Return Hastings Entertainment has a beta of 0.24. If the market return is expected to be 11 percent and the risk- free rate is 4 percent, what is Hastings’ required return? ( LG10- 3)

12- CAPM Required Return Nanometrics Inc. has a beta of 3.15. If the market return is expected to be 10 percent and the risk- free rate is 3.5 percent, what is Nanometrics’ required return? ( LG10- 3)

13- Portfolio Beta You have a portfolio with a beta of 1.35. What will be the new portfolio beta if you keep 95 percent of your money in the old portfolio and 5 percent in a stock with a beta of 0.78? ( LG10- 3)

14- Required Return Paccar’s current stock price is $ 73.10 and it is likely to pay a $ 2.69 dividend next year. Since analysts estimate Paccar will have an 11.2 percent growth rate, what is its required return? ( LG10- 7)

15- Expected Return Risk For the same economic state probability distribution in problem 10- 1, determine the standard deviation of the expected return. ( LG10- 1 )

From Table-

Economic State: Fast growth-

Probability=0.2 Return= 40%

Economic State: Slow growth-

Probability= 0.4 Return= 10

Economic State: Recession-

Probability=0.4 Return= -25

16- Expected Return Risk For the same economic state probability distribution in problem 10- 2, determine the standard deviation of the expected return. ( LG10- 1)

From Table-

Economic State: Fast growth-

Probability=0.2 Return= 35%

Economic State: Slow growth-

Probability= 0.6 Return= 10

Economic State: Recession-

Probability=0.2 Return= -30

Subject | Mathematics |

Due By (Pacific Time) | 04/05/2015 07:00 pm |

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