# Calculate The Expected Returns Of Your Portfolio

21Calculate the expected returns of your portfolioStockInvestExp RetA\$199 3. 6%B\$714 14. 3%C\$455 25%22 Suppose a stock had an initial price of \$66. 63 per share, paid a dividend of \$9. 1 per share during the year, and had an ending share price of \$85. 22. What are the percentage returns?23 A portfolio is invested 39. 5% in Stock A, 14. 9% in Stock B, and the remainder in Stock C. The expected returns are 16. 1%, 24. 8%, and 22. 6% respectively. What is the portfolio’s expected returns?24 Suppose a stock had an initial price of \$63. 92 per share, paid a dividend of \$5. 6 per share during the year, and had an ending share price of \$90. 08. What are the percentage returns if you own 25 shares?25 Suppose the nominal rate is 11. 69% and the inflation rate is 4%. Solve for the real rate. Use the Fisher Effect formula.

# Calculate the expected returns of your portfolio

Question
Calculate the expected returns of your portfolio

Stock Invest Exp Ret
A
\$358

8.1%
B \$954 18.1%
C \$1,383 26%

Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 12.345% then enter as 12.35 in the answer box.

1 points

QUESTION 2
Suppose a stock had an initial price of \$64.29 per share, paid a dividend of \$5 per share during the year, and had an ending share price of \$94.19. What are the dollar returns?

Note: Enter your answer rounded off to two decimal points. Do not enter \$ or comma in the answer box. For example, if your answer is \$12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 3
Suppose the returns for Stock A for last six years was 4%, 7%, 8%, -2%, 9%, and 7%.
Compute the standard deviation of the returns.

Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

1 points

QUESTION 4
You own a portfolio invested 19.2% in Stock A, 19.27% in Stock B, 28.6% in Stock C, and the remainder in Stock D. The beta of these four stocks are 0.82, 0.69, 0.94, and 0.91. What is the portfolio beta?

Note: Enter your answer rounded off to two decimal points. For example, if your answer is 12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 5
Suppose a stock had an initial price of \$66.22 per share, paid a dividend of \$4.3 per share during the year, and had an ending share price of \$84.92. What are the percentage returns?

Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

1 points

QUESTION 6
Calculate the expected returns of your portfolio

Stock Invest Exp Ret
A
\$427

3.6%
B \$921 16.7%
C \$330 28.7%

Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 12.345% then enter as 12.35 in the answer box.

1 points

QUESTION 7
You own a portfolio invested 26.47% in Stock A, 18.59% in Stock B, 22.2% in Stock C, and the remainder in Stock D. The beta of these four stocks are 1.35, 1.33, 0.29, and 1.26. What is the portfolio beta?

Note: Enter your answer rounded off to two decimal points. For example, if your answer is 12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 8
Suppose a stock had an initial price of \$96.73 per share, paid a dividend of \$7.3 per share during the year, and had an ending share price of \$103.32. What are the percentage returns if you own 25 shares?

Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

1 points

QUESTION 9
A portfolio is invested 23.1% in Stock A, 20.1% in Stock B, and the remainder in Stock C. The expected returns are 15.3%, 24%, and 21.7% respectively. What is the portfolio’s expected returns?

Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 12.345% then enter as 12.35 in the answer box.

1 points

QUESTION 10
Based on the following information, calculate the expected returns:

Prob Return
Recession 30% 36.4%
Boom 70% 9.8%

Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 12.345% then enter as 12.35 in the answer box.

1 points

QUESTION 11
Suppose a stock had an initial price of \$60.63 per share, paid a dividend of \$4.6 per share during the year, and had an ending share price of \$97.82. What are the percentage returns?

Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

1 points

QUESTION 12
Suppose a stock had an initial price of \$75.53 per share, paid a dividend of \$8 per share during the year, and had an ending share price of \$80.82. If you own 277 shares, what are the dollar returns?

Note: Enter your answer rounded off to two decimal points. Do not enter \$ or comma in the answer box. For example, if your answer is \$12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 13
You have observed the following returns on ABC’s stocks over the last five years:

4.1%, 9%, -7%, 11%, -6.7%

What is the arithmetic average returns on the stock over this five-year period.

Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

1 points

QUESTION 14
Portfolio diversification eliminates which one of the following?

Total investment risk

Market risk

Unsystematic risk

Reward for bearing risk

1 points

QUESTION 15
A \$36,000 portfolio is invested in a risk-free security and two stocks. The beta of stock A is 1.29 while the beta of stock B is 0.90. One-half of the portfolio is invested in the risk-free security. How much is invested in stock A if the beta of the portfolio is 0.58?
\$6,000
\$9,000
\$12,000
\$15,000
\$18,000
1 points

QUESTION 16
What is the beta of the following portfolio?
1.08
1.14
1.17
1.21
1.23
1 points

QUESTION 17
The systematic risk is same as:

Unique risk

Diversifiable risk

Asset-specific risk

Market risk

Unsystematic risk

1 points

QUESTION 18
You own a portfolio that has \$1,900 invested in Stock A and \$2,700 invested in Stock B. If the expected returns on these stocks are 9 percent and 15 percent, respectively, what is the expected return on the portfolio?

10.57 percent

11.14 percent

11.96 percent

12.52 percent

13.07 percent

1 points

QUESTION 19
The stock of Billingsley United has a beta of 0.92. The market risk premium is 8.4 percent and the risk-free rate is 3.2 percent. What is the expected return on this stock?
8.87 percent
9.69 percent
10.93 percent
11.52 percent
12.01 percent
1 points

QUESTION 20
What is the beta of the following portfolio?
0.98
1.02
1.11
1.14
1.20
1 points

QUESTION 21
Standard deviation measures _____ risk while beta measures _____ risk.

systematic; unsystematic

unsystematic; systematic

total; unsystematic

total; systematic

asset-specific; market

1 points

QUESTION 22
You own a portfolio of two stocks, A and B. Stock A is valued at \$6,540 and has an expected return of 11.2 percent. Stock B has an expected return of 8.1 percent. What is the expected return on the portfolio if the portfolio value is \$9,500?
9.58 percent
9.62 percent
9.74 percent
9.97 percent
10.23 percent
1 points

QUESTION 23
If markets are efficient, the difference between the instrinsic value and the market value of the comapny’s security is:

zero

positive

negative

1 points

QUESTION 24
Semi-strong-form efficient markets are not weak-form efficient.

True

False

1 points

QUESTION 25
Suppose the real rate is 3.33% and the nominal rate is 8.28%. Solve for the inflation rate. Use the Fisher Effect equation.

Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.