You are considering two assets with the following characteristics. E(R1) = E(σ1) = w1 = 0.5 E(R2) = E(σ2) = w2 = 0.5 What will be the difference in the standard deviations of the two-stock portfolio if correlation change from  r1,2 = to ? Do not round intermediate calculations. Round your answers for the difference in standard deviations of the two-stock portfolio to 4 decimal places. Include the negative sign if the answer is negative. Example -0.0466.  You can use the spreadsheet to solve the question:Exam 2 Spreadsheet.xlsx

A company had $22 of sales per share for the year that just ended. You expect the company to grow their sales at 6.25 percent for the next five years. After that, you expect the company to grow 4 percent in perpetuity. The company has a 14 percent ROE and you expect that to continue forever. The company’s net margins are 5 percent and the cost of equity is 8 percent. Use the free cash flow to equity model to value this stock. Do not round intermediate calculations. Round your answer to the nearest cent. Do not include the $ sign. Example: 12.21  You can use the spreadsheet to solve the question:Exam 2 Spreadsheet.xlsx

Calculate the expected return for C Inc., which has a beta of 0.8 when the risk-free rate is 0.04 and you expect the market return to be 0.12.  You can use the spreadsheet to solve the question: Exam 2 Spreadsheet.xlsx

What is the value of a preferred stock that has a par value of $100, a required rate of return of 11 percent, and pays a 7 percent annual dividend?  You can use the spreadsheet to solve the question: Exam 2 Spreadsheet.xlsx

Calculate the expected return for F Inc., which has a beta of 1.3 when the risk-free rate is 0.06 and you expect the market return to be 0.125.  You can use the spreadsheet to solve the question: Exam 2 Spreadsheet.xlsx

Exhibit 7.1 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)   ​ Rates of Return Year RA Computer Market Index 1 13 17 2  9 15 3 -11  6 4 10  8 5 11 10 6  6 12       Refer to Exhibit 7.1. Compute the beta for RA Computer using the historic returns presented above.  You can use the spreadsheet to solve the question: Exam 2 Spreadsheet.xlsx

You are considering two assets with the following characteristics. E(R1) = E(σ1) = w1 = 0.5 E(R2) = E(σ2) = w2 = 0.5 What will be the difference in the standard deviations of the two-stock portfolio if correlation change from  r1,2 = to ? Do not round intermediate calculations. Round your answers for the difference in standard deviations of the two-stock portfolio to 4 decimal places. Include the negative sign if the answer is negative. Example -0.0466.  You can use the spreadsheet to solve the question:Exam 2 Spreadsheet.xlsx

Exhibit 7.1 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)   ​ Rates of Return Year RA Computer Market Index 1 13 17 2  9 15 3 -11  6 4 10  8 5 11 10 6  6 12       Refer to Exhibit 7.1. Compute the correlation coefficient between RA Computer and the Market Index.  You can use the spreadsheet to solve the question: Exam 2 Spreadsheet.xlsx

Exhibit 6.2 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)   Asset (A) Asset (B) E(RA) = 25% E(RB) = 15% (sA) = 18% (sB) = 11% WA = 0.75 WB = 0.25 COVA,B = -0.0009   Refer to Exhibit 6.2. What is the standard deviation of this portfolio?  You can use the spreadsheet to solve the question: Exam 2 Spreadsheet.xlsx

Exhibit 7.2 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)   You expect the risk-free rate (RFR) to be 3 percent and the market return to be 8 percent. You also have the following information about three stocks.   ​ ​ Current Expected Expected Stock Beta Price Price Dividend X 1.25 $20 $23 $1.25 Y 1.50 $27 $29 $0.25 Z 0.90 $35 $38 $1.00     Refer to Exhibit 7.2. What are the expected (required) rates of return for the three stocks (in the order X, Y, Z)?  You can use the spreadsheet to solve the question: Exam 2 Spreadsheet.xlsx