Risk Free System

dlm1ok asked:


I have no pension, need low risk for investments. What are some possiblities with a likelihood of gains.

Essence

Jenny J asked:


Returns on an investment are uncertain. You estimate the likelihood of alternative returns based on the estimated probabilities of f possible outcomes:

Outcome ReturnEstimated Probability of Outcome
13%.05
27%.25
310%.40
413%.25
517%.05

a.Calculate the expected return.
b.Calculate the standard deviation of the return

Dublin Plastics Inc.’s stock is selling for $17.60. Your research suggests it will pay dividends of $2.00 next year and $2.80 the following year, after which its stock price will have peaked at $21.00. You require a return of 20% on similar investment risk. Should you buy now and sell when the price reaches $21.00?

A four-stock portfolio is made up as follows:
Stock Current Value Beta
A$15,300 .5
B$28,700 .9
C$19,600 1.2
D$10,400 1.7

a.Calculate the portfolio’s beta
b.How relatively risky is this portfolio? Could the portfolio have more risk? Could the portfolio have less risk?

Jada