Stock Analysis Question Answer 2022

Running head: STOCK ANALYSIS
Stock Analysis
Name of the Student:
Name of the University:
Author Note:

STOCK ANALYSIS1
Table of Contents
Answer to Question 1:................................................................................................................2
Part a).....................................................................................................................................2
Part b).....................................................................................................................................2
Part c).....................................................................................................................................3
Part d).....................................................................................................................................4
Part e).....................................................................................................................................5
Answer to Question 2:................................................................................................................6
Part a (i))................................................................................................................................6
Part a (ii))...............................................................................................................................6
Part b).....................................................................................................................................7
Part c).....................................................................................................................................8
Answer to Question 3:................................................................................................................8
Part a, b and c)........................................................................................................................8
Part d)...................................................................................................................................10
Part e)...................................................................................................................................10
Answer to Question 4:..............................................................................................................11
Answer to Question 5:..............................................................................................................13
Part A)..................................................................................................................................13
Part B)..................................................................................................................................14
Answer to Question 6:..............................................................................................................14
Part a & b)............................................................................................................................14

STOCK ANALYSIS2
Part c)...................................................................................................................................15
Answer to Question 7:..............................................................................................................16
Part a)...................................................................................................................................16
Part b)...................................................................................................................................17
Part c)...................................................................................................................................19
Answer to Question 8:..............................................................................................................20
Part a)...................................................................................................................................20
Part b)...................................................................................................................................20
Part c)...................................................................................................................................21
Answer to Question 9:..............................................................................................................22
Part a)...................................................................................................................................22
Part b)...................................................................................................................................22
Part c)...................................................................................................................................22
References and Bibliographies:................................................................................................23

STOCK ANALYSIS3
Answer to Question 1:
Part a)
The expected return for the two securities A and B are calculated in the table below,
Figure 1: Expected Return
Source: By the Author
The expected return on security A is 7.70% and in security B is 13.90% which is
provided in the figure above.
Part b)
The standard deviation of security A is given in the figure below,
Figure 2: Standard Deviation of Security A
Source: By the Author
The standard deviation of security A is calculated at 27.44% and the corresponding
formula are given below the calculation for your reference. The standard deviation of security
B is highlighted in the figure below,

STOCK ANALYSIS4
Figure 3: Standard Deviation of Security B
Source: By the Author
The standard deviation of security B is calculated at 21.43%. The method to calculate
the standard deviation is given in the following points,
 The probability is considered to be x and the expected return is taken as the average
return.
 The expected average return is subtracted from the probability and the results are
squared.
 The squared results are multiplied with the probability of the individual security and
the state of economy.
 The square root of the above results sum gives the standard deviation of each security.
Part c)
The expected return of the portfolio consisting of the two securities A and B with the
weights of 60% and 40% respectively is given in the figure below,

STOCK ANALYSIS5
Figure 4: Expected return in boom cycle
Source: By the Author
The expected portfolio return in the boom cycle is coming at 3.29% and the respective
formula are given in the table along with the calculation.
Part d)
The expected or forecasted return from a portfolio is calculated by multiplying the
expected return of the individual security with their weights in the portfolio. The calculation
for the same is given in the figure below,
Figure 5: Portfolio Return
Source: By the Author
The total portfolio return with the weights of 60% in security A and 40% in security B
generates 10.18%.