1-)The past five monthly returns for PG&E are ?3.47 percent, 4.63 percent, 4.07 percent, 6.92 percent,
and 3.88 percent. What is the average monthly return? (Round your answer to 3 decimal places.)
% Average return 2-) If you own 300 shares of Xerox at $18.04, 400 shares of Qwest at $8.85, and 200 shares of Liz
Claiborne at $45.43, what are the portfolio weights of each stock? (Round your answers to 3 decimal
places.)
Portfolio weights
Xerox
Qwest
Liz Claiborne 3-) At the beginning of the month, you owned $8,000 of General Dynamics, $7,000 of Starbucks, and
$5,000 of Nike. The monthly returns for General Dynamics, Starbucks, and Nike were 6.80 percent,
?1.52 percent, and ?0.62 percent. What is your portfolio return? (Do not round intermediate
calculations and round your final answer to 2 decimal places.)
% Portfolio return 4-) At the beginning of the month, you owned $9,000 of News Corp, $6,000 of First Data, and $5,000 of
Whirlpool. The monthly returns for News Corp, First Data, and Whirlpool were 9.80 percent, ?2.77
percent, and 11.93 percent. What’s your portfolio return? (Do not round intermediate calculations and
round your final answer to 2 decimal places.)
% Portfolio return 5-) The past five monthly returns for Kohl’s are 3.54 percent, 3.62 percent, ?1.68 percent, 9.25 percent,
and ?2.56 percent. Compute the standard deviation of Kohls’ monthly returns. (Do not round
intermediate calculations and round your final answer to 2 decimal places.)
Standard deviation % 6-) Table 9.2 Average Returns for Bonds
1950 to 1959
1960 to 1969
1970 to 1979 Average
Average
Average Low-risk bonds
2.3%
4.6
6.1 1980 to 1989
1990 to 1999
2000 to 2009 Average
Average
Average 8.2
4.7
2.6 Table 9.4 Annual Standard Deviation for T-Bills 1950 to 1959
1960 to 1969
1970 to 1979
1980 to 1989
1990 to 1999
2000 to 2009 Low-risk bonds
1.1%
1.8
2.2
2.7
1.3
2.1 Calculate the coefficient of variation of the risk-return relationship (Use the above Tables) during each
decade since 1950. (Round your answers to 2 decimal places.)
Decade CoV 1950s
1960s
1970s
1980s
1990s
2000s 7-) Following are three economic states, their likelihoods, and the potential returns:
Economic State
Fast growth
Slow growth
Recession Probability Return
0.28
26 %
0.38
14
0.34
–36 Determine the standard deviation of the expected return. (Round your answer to 2 decimal places.)
Standard deviation % 😎 You own $16,416 of Human Genome stock that has an assumed beta of 3.51. You also own $13,824
of Frozen Food Express (assumed beta = 1.63) and $12,960 of Molecular Devices (assumed beta = 0.88).
What is the beta of your portfolio? (Do not round intermediate calculations and round your answer
to 2 decimal places.)
Portfolio beta 9-) A manager believes his firm will earn a 16.80 percent return next year. His firm has a beta of 1.31, the
expected return on the market is 13.40 percent, and the risk-free rate is 6.40 percent.
Compute the return the firm should earn given its level of risk. (Round your answer to 2 decimal
places.)
Required return % Determine whether the manager is saying the firm is undervalued or overvalued. Which one?
Overvalued
Undervalued 10-) You own $13,120 of Olympic Steel stock that has a beta of 3.12. You also own $9,920 of Rent-aCenter (beta = 1.91) and $8,960 of Lincoln Educational (beta = 0.49).
What is the beta of your portfolio? (Do not round intermediate calculation and round your answer to
2 decimal places.)
Portfolio beta
