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WITCHER [35]
3 years ago
5

Task 1 . The income (in thousand $) of 5 small companies labeled AA , BB , CC , DD , EE has been calculated and the results are

as follo,;vs:
2.49j 2.39j 2.39, 1.79, 3.8 .
1. Put the obtained data as points on the following coordinate system.


Income value


3

2

1


AA BB CC DD EE Company

2. Calculate the mean value from the sample for these data:


On the chart draw a line y = x (a horizontal line at the level of the mean of the sample) and for every measurement mark the difference between the value of the measurement and the sample mean.
3. Calculate the samples variance, standard deviation and the estimator of variance:

Icr2 =_.!_ f=_(xi -

I• I

__ n i=l

x_) _= iT





4. Write proper values into the following tagged fields and interpret the results obtained:

CJ CJ
x - 20- x - a x+ a x+ 20-

Date of simulation : 2021 03 02 20:30:20.050 Seed: 20302 8071 .




8

Business
1 answer:
Georgia [21]3 years ago
7 0

Answer:

yggjuytygyvcfryttgggv

Explanation:

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Answer:

Option A is the correct answer.

A. Advisor A was better because he generated a larger alpha.

Explanation:

To determine which adviser would be the better stock selector, we will calculate the required rate of return of each adviser and the return actually averaged. The adviser with the greater abnormal return, which is return in excess of required rate, will be the better stock selector.

Using the CAPM, we can calculate the required rate of return on a stock. This is the minimum return required by the investors to invest in a stock based on its systematic risk, the market's risk premium and the risk free rate.

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Abnormal or excess return of Adviser A = 20% - 17% = 3%

r of Adviser B = 0.05 + 1.2 * (0.13 - 0.05)

r of Adviser B = 0.146 or 14.6%

Abnormal or excess return of Adviser B = 15% - 14.6% = 0.4%

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Answer:

12.085 %

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WACC = Cost of Equity x Weight of Equity + Cost of Preference Stock x Weight of Preference Stock + Cost of Debt x Weight of Debt

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