EMail Address: support@swiftassignments.com
Estimating Risk and Return
Estimating Risk and Return
Respond to two questions and solve five computational problems related to estimating risk and return.
By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:
 Competency 1: Evaluate the global financial environment.
 Identify challenges for practitioners in using expected return.
 Explain how different allocations between the riskfree security and the market portfolio can achieve any level of desired market risk.
 Calculate expected return, considering the possibility of differing economic states.
 Calculate required return, considering the riskfree rate and the risk premium.
 Calculate the market risk premium of the Standard and Poor’s 500 Index, showing applicable input values, computational steps, and formulas.
 Explain why expected return is considered forwardlooking.
 Calculate the beta of a portfolio, showing applicable input values, computational steps, and formulas.
 Competency 2: Define finance terminology and its application within the business environment.
 Calculate required return, using the capital asset pricing model.
Assessment Instructions
Answer the following questions and complete the following problems:Questions
In a Word document, respond to the following. Number your responses 1–2.
 Explain why expected return is considered forwardlooking. What challenges arise in using expected return?
 Explain how differences in allocations between the riskfree security and the market portfolio can determine the level of market risk.
Use references to support your responses as needed. Be sure to cite all references using correct APA style. Your responses should be free of grammar and spelling errors, demonstrating strong written communication skills.
Problems
In either a Word document or Excel spreadsheet, complete the following problems.
 You may solve the problems algebraically, or you may use a financial calculator or an Excel spreadsheet.
 If you choose to solve the problems algebraically, be sure to show your computations.
 If you use a financial calculator, show your input values.
 If you use an Excel spreadsheet, show your input values and formulas.

 Based on the probability and percentage of return for the three economic states in the table below, compute the expected return.
Economic State Probability Percentage of Return Fast Growth 0.10 60 Slow Growth 0.50 30 Recession 0.40 23  If the riskfree rate is 7 percent and the risk premium is 4 percent, what is the required return?
 Suppose that the average annual return on the Standard and Poor’s 500 Index from 1969 to 2005 was 14.8 percent. The average annual Tbill yield during the same period was 5.6 percent. What was the market risk premium during these 10 years?
 Conglomco has a beta of 0.32. If the market return is expected to be 12 percent and the riskfree rate is 5 percent, what is Conglomco’s required return? Use the capital asset pricing model (CAPM) to calculate Conglomco’s required return.
 Calculate the beta of a portfolio that includes the following stocks:
 Conglomco stock, which has a beta of 3.9 and comprises 35 percent of the portfolio.
 Supercorp stock, which has a beta of 1.7 and comprises 25 percent of the portfolio.
 Megaorg stock, which has a beta of 0.3 and comprises 40 percent of the portfolio
Click here to ORDER an A++ paper from our MASTERS and DOCTORATE WRITERS
Who We Are
We are a professional custom writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework.
Do you handle any type of coursework?
Yes. We have posted over our previous orders to display our experience. Since we have done this question before, we can also do it for you. To make sure we do it perfectly, please fill our Order Form. Filling the order form correctly will assist our team in referencing, specifications and future communication.
Is it hard to Place an Order?
1. Click on the “Order Now ” on the main Menu and a new page will appear with an order form to be filled.
2. Fill in your paper’s requirements in the “PAPER INFORMATION” section and the system will calculate your order price/cost.
3. Fill in your paper’s academic level, deadline and the required number of pages from the dropdown menus.
4. Click “FINAL STEP” to enter your registration details and get an account with us for recordkeeping and then, click on “PROCEED TO CHECKOUT” at the bottom of the page.
100% Reliable Site. Make this your Home of Academic Papers.
Always Order HighQuality Academic Papers from HERE
5. From there, the payment sections will show, follow the guided payment process and your order will be available for our writing team to work on it.
SCORE A+ WITH HELP FROM OUR PROFESSIONAL WRITERS: ORDER NOW FOR AN ORIGINAL PAPER ASSIGNMENT
We will process your orders through multiple stages and checks to ensure that what we are delivering to you, in the end, is something that is precise as you envisioned it. All of our essay writing service products are 100% original, ensuring that there is no plagiarism in them. The sources are wellresearched and cited so that it is interesting. Our goal is to help as many students as possible with their assignments, i.e. our prices are affordable and services premium.