1) An investor is trying to assess the likely return from a stock he is considering to invest. He polls with 3 analysts, who indicate the likely returns over the investment horizon and thecorresponding probabilities (given in table below). Calculate the Expected Return (Average), Variance of Returns and Standard Deviation of Returns for the stock.??.(10marks)Returns % Probability %10 4515 3020 252) Suppose you invest 25% of your portfolio in AT&T and 75% in Disney. Expected $ return on these stocks is 12% and 16% respectively. The Standard deviation of their annualized dailyreturns are 20% & 24%, respectively.??.Assume a correlation coefficient of 0.75 and calculate Portfolio variance and Standard Deviation. (20 marks)3) During the boom years of 2003- 2007, ace mutual fund manager Diana Souros produced the following percentage rates of return.??.The rates of return on the market (S&P 500) are given forcomparison. Compare Ms Sauros performance with that of the market. Calculate the average return and standard deviation of Ms. Sauros?s mutual fund and that of the market (S&P 500). HasSouros performed better than the market (S&P 500)? (20 marks)2003 2004 2005 2006 2007Ms. Sauros- 39 11 3 18 4S&P 500 ? 32 13 7 16 7??.
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