TUGAS KELOMPOK

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Goodluck!

1. Syntex, Inc., is considering an investment in one of two common stocks. Given

the information that follows, which investment is better, based on risk (as
measured by the standard deviation) and return?

2. Marsh Inc. had the following end-of-year stock prices over the last five years
and paid no cash dividends:

a. Calculate the annual rates of return for each year from this information.
b. What is the arithmetic average rate of return earned by investing in Marsh’s
stock over this period?
c. What is the geometric average rate of return earned by investing in Marsh’s
stock over this period?
3. Compute the expected rate of return for Intel common stock, which has a 1.2
beta. The risk-free rate is 3.5 percent, and the market portfolio (composed of
New York Stock Exchange stocks) has an expected return of 16 percent.

4. Anita, Inc., is considering the following investments. The current rate on

Treasury bills is 4.5 percent, and the expected return for the market portfolio
is 11 percent. Using the CAPM, what rate of return should Anita require for
each individual security?

5. Mary Guilott recently graduated from Nichols State University and is anxious
to begin investing her meager savings as a way of applying what she has
learned in business school. Specifically, she is evaluating an investment in a
portfolio comprised of two firms’ common stock. She has collected the
following information about the common stock of Firm A and Firm B:

a. If Mary invests half her money in each of the two common stocks, what is the
portfolio’s expected rate of return and standard deviation in portfolio return?
b. Answer part a where the correlation between the two common stock
investments is equal to zero.
c. Answer part a where the correlation between the two common stock
investments is equal to +1.
d. Answer part a where the correlation between the two common stock
investments is equal to -1.
e. Using your responses to parts a–d, describe the relationship between
correlation and the risk and return of the portfolio.