Solving problems using excel

Please follow  instructions 

2

>Module 0

5

alculate the investment’s expected return and its standard deviation

TA

0

10.0%

0

return

and

for periods 2 through 4.

Waters

Period

1

2

3

.00

4

Panner

Period
Price

1

2

3

4

SAR per share on April, 1 2021 and sold 12 shares for 28.35 SAR on August 1, 2022.

DATA

DATA

25.35

12

DATA

eta

A

B

C

and Security Market Line

Calculate the expected return on your portfolio. (The expected return of a portfolio equals the weighted average of the indivdiual stocks’ expected returns, where the weights are the percentage invested in each stock).

DATA

Expected

Stock

Beta
Return

1
10.0%
0.95

2

3

0.85

4
25.0%

5.0%

5

1.0%

common stock, which has a beta of 1.25.The risk -free rate is 2 percent, and the market portfolio has an expected return of 13 percent.

Solution:

DATA

2.0%

1.25

.

DATA

a.

ABC Corporation

S&P 500 Index

Returns
Prices

2,025

								Problem 5-			1
Rate of return and standard deviation
Porter, Inc. is evaluating a security.	C
				D	A
Probability		Return
0.10	–		10.0%
0.20		5.0%
0.			3
0.			4		25.0%
	Expected
Variance
Standard deviation
Problem 5-2	Holding		Period	Returns
From the price data tha follow, compute the holding period returns for	Waters	Panner
		DATA
	Price
8.00
10.00
	12
14.00
26.00
29.00
30.00
28.00
Problem 5-3: Holding-Period Gain SAR and Return
Suppose you purchased 20 shares of Apple stock for	25.35
Calculate the holding-period SAR gain for the shares you sold, assuming no dividends was distributed , and the holding-period rate of return.
	Solution:
HOLDING PERIOD SARS GAIN AND RETURN
Purchase price
Selling price	28.32
Shares sold
Holding-period gain
Holding-period return
Problem 5-4
CAPITAL ASSET PRICING MODEL
Using the Capital Asset Pricing Model, estimate the appropriate required rate of return for the three stocks listed below, given that the risk-free rate is 5 percent and the expected return for the makret is 12 percent.
	Stock		B
	0.85
	0.95
1.65
Problem 5-5: Portfolio	Beta
Based on the data below:
	a.
b. Calculate the portfolio beta.
Percentage
of Portfolio
1	1.0%
2	2.0%		1.25	7.0%
23.0%	12.0%
0.60
20.0%	1.60
Problem 5-6: Required Rate of Return CAPM
Compute an appropriate rate of return for	ABC Corporation
Risk-free rate =
Market expected return =	13.0%
Beta =
Rate of return =
Problem 5-7: Expected Return, Standard Deviation
Below are the prices for ABC Corporation and the	S&P 500 Index
a. Calculate the monthyly holding-eriod returns for ABC and the S&P 500 Index.
b. What are the average monthly returns and stardard deviations for each?
Month
	Prices
May-21	48.55		2,025
Jun-21	48.11	-0.91%	2,024
Jul-21	48.95	1.75%	2,026
Aug-21	50.55	3.27%	2,013
Sep-21	50.82	0.53%	2,014
Oct-21	52.55	3.40%	2,018
Nov-21	53.75	2.28%	2,023
Dec-21	54.05	0.56%
Jan-22	47.95	-11.29%	1,995
Feb-22	51.33	7.05%	2,095
Mar-22	51.58	0.49%	2,096
Apr-22	52.42	1.63%	2,088
May-22	53.77	2.58%	2,105